LABOR- VALUE  FALLACY 


LIBRARY 


UNIVERSITY   OF   CALIFORNIA. 

Received  ^    . 
Accessions  No.^f  /0  Shelf  No. 


THE 


LABOK-VALUE    FALLACY 


BY    M.    L.    SCUDDER,    JR., 

AUTHOR  OF  "CONGESTED  PRICES,"  ETC. 


CHICAGO: 

JANSEN,  McCLURG,  &  COMPANY. 
1884. 


COPYRIGHT 
BY  JANSEN,  McCLURG,  &  CO., 

1884. 


E.   R.   DONNELLEY  &   SONS,   THE  LAKESIDE  PRESS,   PRINTERS. 


ujm          'T 


INTRODUCTION. 


No  one  can  regard  with  absolute  indifference  the 
fierce  discussions  concerning  social  relations  which 
are  now  agitating  Europe  and  America.  Every 
inhabitant  of  these  continents  has  something  at  stake 
upon  the  outcome  of  these  discussions ;  and  it  is 
very  important  that  sincere  men  should  be  able  to 
take  a  clear  and  confident  stand  in  these  disputes. 

I  have  observed  that  a  large  proportion  of  men, 
who  are  beyond  question  intelligent  and  sincere,  are 
far  from  confident  in  reference  to  socialism.  On  the 
contrary,  I  have  found  many  benevolent,  well- 
informed  men  in  avowed  sympathy  with  socialism. 
It  is  not  uncommon  to  hear  a  good  word  for  social- 
ism spoken  by  careful  and  conservative  citizens,  and 
not  infrequently  I  have  heard  socialist  arguments  put 
by,  as  impracticable,  solely  on  the  ground  that  man- 
kind never  can  expect  to  reach  perfection. 

For  a  long  time  I  was  befogged  and  perplexed 
by  socialist  reasoning.  The  arguments  seem  un- 
answerable, when  their  theory  alone  is  considered  ; 
but  their  application  to  practical  affairs  involves  so 


The  Labor  -  Value  Fallacy. 


much  that  is  unfair  and  unjust,  so  much  that  is 
destructive  of  the  noblest  qualities  of  individual 
character,  and  the  most  prized  influences  of  social 
life  that  their  adoption  seems  a  dreadful  possibility. 
It  seems  that  in  order  to  follow  a  correct  theory, 
one  must  engage  in  a  cruel  crusade  against  the 
cherished  institutions  of  modern  civilization.  The 
choice  is  a  hard  one ;  and  yet,  I  believe,  that  there 
are  thousands  in  whose  minds,  this  question  has 
taken  this  form.  I  believe  that  there  are  many 
thousands  of  well-meaning,  order-loving  people,  who, 
affected  by  socialist  reasoning  and  the  current  teach- 
ing of  political  economy,  entertain  more  or  less  well 
defined  opinions,  that  the  principles  upon  which 
society  is  organized  are  radically  wrong. 

The  manner  in  which  the  writings  of  Mr.  Henry 
George  have  been  received,  read  and  commented 
upon,  shows  this  quite  sufficiently.  I  do  not  say 
that  he  has  secured,  in  this  country,  a  large  follow- 
ing, who  are  ready  to  put  in  practice  his  scheme  for 
the  "nationalization  of  the  land."  His  book,  "  Pro- 
gress and  Poverty,"  which  posterity  will  probably 
adjudge  mere  balderdash,  has  had  a  wider  circula- 
tion than  any  other  book  published  in  recent  years. 
It  has  been  seriously  and  respectfully  read ;  and  the 
tone  in  which  editors  and  professors  and  thoughtful 
men  speak  of  it,  shows,  at  least,  that  much  doubt 


Introduction. 


exists  as  to  whether  his  claims  are  not  sound.  The 
partial  and  inadequate  character  of  the  replies  which 
have  been  made  to  his  arguments,  and  the  bad 
temper  with  which  his  views  have  been  denounced 
without  being  disproved,  exhibit  too  the  profound 
impression  which  he  has  made  on  the  public  mind. 
I  think,  I  may  describe  the  state  of  mind,  in  which 
Mr.  George's  book  is  generally  read,  as  one  of  in- 
voluntary credulity.  Men  refuse  to  accept  and  act 
upon  the  conclusions,  but  do  not  deny  the  argument. 
Although  I  venture  into  this  field  with  much 
hesitation,  I  shall  attack  the  very  foundation  of  Mr. 
George's  argument.  In  doing  this,  I  shall  be  com- 
pelled to  controvert  the  positive  conclusions  of  much 
higher  authority  than  Mr.  George  can  claim  to  be. 
I  expect  to  be  misunderstood  by  the  superficial, 
condemned  by  the  careless,  and  perhaps  villified  by 
partisans  and  controversialists.  I  wish  to  disclaim  at 
the  outset  a  too  positive  tone,  for  in  examining 
these  great  questions  there  is  always  the  danger 
that  one  may  mistake  a  part  of  the  subject  for  the 
whole.  There  may  be  facts  just  outside  the  field  of 
vision,  which,  if  embraced  in  the  view,  would  mate- 
rially modify  or  change  the  picture.  But  while 
admitting  this  possibility,  I  shall  strive  to  tell  accur- 
ately, and  without  prejudice,  so  much  as  I  have  to 
tell.  The  proper  spirit  it  seems  to  me,  is  that  each 


8  The  Labor  -  Value  Fallacy. 

one  shall  describe  clearly  what  each  one  sees,  but 
with  the  constant  admission  that  no  one  can  see  it 
all. 

I  do  not  appeal  to  the  authority  of  great  names,, 
but  to  the  every -day  common  sense  of  those  who 
favor  me  with  their  attention,  and  I  shall  be  satisfied 
if  I  may  be  able  to  impart  to  some  well-meaning 
men  new  confidence  in  old  virtues,  (if  I  can  show 
that  intelligence,  diligence,  sobriety  and  honesty  still 
remain  the  only  trustworthy  means  by  which  success 
and  contentment  can  be  attained,)and  that  all  theor- 
ies for  securing  the  rewards  of  these  virtues,  without 
the  rigid  practice  of  them  are  fallacious  and  vain,  I 
shall  rest  well  pleased. 

There  are  many  who  are  looking  gloomily  into 
the  future,  seeing  there  the  triumph  of  socialism — 
family  ties  and  home  life  destroyed,  social  inter- 
course made  a  monotonous  routine  of  distasteful 
endurance,  and  man  reduced  to  a  mere  feeding, 
muscle-exerting  machine.  It  is  my  aim  to  prove  to 
those  discouraged  by  this  vision,  that  the  true  pro- 
gress of  mankind  is  not  in  this  direction,  and  that 
it  needs  but  a  clear  appreciation  of  the  fundamental 
conditions  of  economic  relations  to  dissipate  this 
disagreeable  apprehension.  This  horrible  Franken- 
stein, socialism,  now  dominates  with  its  baleful  power 
many  minds.  If  the  central  and  vital  secret  of  this 


Introduction. 


monstrous  enchantment  can  be  touched  and  destroyed, 
it  will  vanish  shrieking,  like  the  baffled  evil  genius 
of  the  Arabian  tale,  and  its  victims,  relieved  of  its 
paralyzing  presence,  will  breathe  again  f  with  old 
courage  and  hope. 


THE  LABOE- VALUE  FALLACY. 


THERE  are  two  kindred  propositions,  which  are  gen- 
erally tacitly  assented  to,  and  which  I  think  produce  a 
a  vast  amount  of  discontent  and  misery.  These  are 

i  st.  All  wealth  is  created  by  labor. 

2nd.  The  title  to  all  wealth  ought  to  be  vested  in  the 
laborers  who  have  produced  it. 

To  a  great  many  intelligent  people,  I  have  no  doubt, 
these  propositions  seem  self-evident  truths.  They  pass 
currently  unchallenged.  They  appear  as  the  founda- 
tions of  the  creeds  of  nearly  all  the  labor  agitators. 
They  give  the  key  note  to  the  labor  discussions  in  the 
newspapers.  They  figure  prominently  in  political  plat- 
forms, and  in  the  minds  of  numbers  of  men,  who  are 
neither  agitators,  editors  nor  politicians,  there  is  a  con- 
sciousness, proceeding  from  habit,  that  it  is  useless  to 
question  these  dictums.  There  are  thousand  of  work- 
men, too,  to  whom  these  propositions  have  an  almost  re- 
ligious sacredness,  and  in  whom,  sullen  rage  and  feelings 
of  continued  injury  are  produced,  by  ruminating  upon 
them.  They  furnish  the  basis  for  all  modern  socialist  sys- 
tems. The  International  with  its  million  of  members,  the 
Nihilist  societies  of  Europe,  the  socialist-labor  parties 
of  Germany  and  the  United  States,  have  been  animated 


The  Germ  of  the  Fallacy.  11 

and  energized  by  belief  in  them.  And  whatever  of 
logical  consistency  one  can  discover  in  the  writings  of 
Mr.  Henry  George,  comes  from  the  assumption  of  the 
truth  of  these,  his  fundamental  premises. 

It  is  my  purpose  to  call  in  question  the  truth  of  these 
important  propositions.  I  think  them  wholly  false.  I 
think  that  all  theories  and  systems  springing  from  them 
must  be  erroneous  and  demoralizing,  and  that  all 
attempts  to  put  them  in  practice  will  end  disastrously. 

The  germ  of  the  proposition  that  all  wealth  is  created 
by  labor  can  be  traced  to  Adam  Smith.  He  said,  in 
"the  Wealth  of  Nations,"  "The  real  price  of  every- 
thing, what  everything  really  costs  to  the  man  who 
wants  to  acquire  it,  is  the  toil  and  trouble  of  acquiring 
it,  etc."  "  Labor  was  the  first  price — the  original  pur- 
chase-money that  was  paid  for  all  things."  "  In  that 
early  and  rude  state  of  society,  which  precedes  both 
the  accumulation  of  stock  and  the  appropriation  of 
land,  the  proportion  between  the  quantities  of  labor 
necessary  for  acquiring  different  objects,  seems  to  be 
the  only  circumstance  which  can  afford  any  rule  for 
exchanging  them  for  one  another." 

These  and  other  similar  expressions,  which  can  be 
found  in  his  book,  are  by  no  means  the  equivalent  of 
the  modern  form  of  this  proposition.  Adam  Smith 
seems  to  regard  these  ideas  concerning  value,  as  merely 
suggestive,  and  as  applying  especially,  to  the  early  and 
chiefly  imaginary  condition  of  man.  When  he  treats 
of  actual  transactions  in  the  market,  he  accounts  for  the 
values  of  commodities  in  quite  another  way.  But  he 


12  The  Labor -Value  Fallacy. 

said  enough  to  suggest  the  notion  to  Ricardo,  and  it 
was  by  him  made  more  definite  and  positive.  Ricardo 
maintained  that  the  exchangeable  values  of  commod- 
ities are  in  proportion  to  the  quantities  of  labor  expended 
in  their  production.  But  he  carefully  explained  that 
this  is  true  only  of  commodities  in  the  production  of 
which  unrestrained  competition  is  possible. 

John  Stuart  Mill  gave  much  encouragement  to  the 
growth  of  this  proposition,  by  the  professed  adoption 
of  Ricardo's  definition,  although  qualifying  his  approval 
by  many  important  conditions.  He  said,  "  The  value  of 
commodities  therefore  depends  principally,  ....  on 
the  quantity  of  labor  required  for  their  production  ; 
including  in  the  idea  of  production  that  of  conveyance 
to  market."  He  also  carefully  limited  the  application 
of  this  rule,  "  to  cases  in  which  values  and  prices  are 
determined  by  competition  alone." 

Following  in  the  foot-steps  of  these  illustrious  think- 
ers, subsequent  writers  on  political  economy  have 
treated  of  value  as  the  creation  of  labor,  generally  com- 
plicating the  idea  with  more  or  less  original  modifica- 
tions, but  almost  always  presenting  labor  as  the  most 
important  element  in  determining  value.  Even  Bas- 
tiat's  definition  of  value,  "  the  relation  of  two  services 
exchanged,"  receives  this  interpretation  from  many  of 
his  disciples,  service  being  understood  by  them  to  mean 
labor. 

The  result  of  these  discussions  has  been,  that  the 
various  complicated  exceptions  to  this  theory  of  value 
have  been  overlooked  by  general  readers,  and  the  cen- 


The  Foundation  of  Socialism.  13 

tral  idea  only  has  remained  in  the  popular  opinion  ; 
and  it  has  come  to  be  commonly  accepted  as  a  funda- 
mental truth,  that  value  is  created  solely  by  labor. 

On  this  foundation  the  socialists  have  built.  Karl 
Marx  is  probably  the  leading  socialist  reasoner,  and  his 
reasoning  starts  from  the  assumption,  that  all  value 
should  be  measured  in  units  of  labor.  It  was  his  argu- 
ment, preached  among  the  workmen  of  Germany  and 
France,  which  caused  a  million  names  to  be  enrolled  as 
members  of  the  secret  society  of  the  International. 
It  was  his  teaching,  developed  though  the  International, 
which  contrived,  directed  and  afterwards  approved  the 
atrocities  perpetrated  in  1871,  under  the  Commune  of 
Paris.  These  theories  animate  the  nihilists  of  Russia, 
and  kindle  in  the  breasts  of  students  and  young  girls 
an  enthusiasm  for  assassination  and  destruction,  which 
the  severest  punishments  cannot  repress.  v 

I  confess,  that  if  Karl  Marx  is  right,  in  assuming  that 
all  value  is  created  by  labor,  and  that  laborers  are  justly' 
entitled  to  the  products  of  their  labor,  that  it  is  ex- 
tremely difficult  to  show  where  his  followers  are  logi- 
cally wrong,  in  concluding  that  all  private  property  is- 
theft,  that  property  owners  are  generally  criminals,  and 
that  those  who  support  and  administer  governments, 
which  do  not  recognize  the  right  of  the  laborer  to  pos- 
sess all  the  products  of  his  labor,  are  social  pests, 
whom  it  may  be  a  social  duty  to  remove. 

That  this  conclusion  is  warranted  by  this  premise,  is 
evidenced  by  the  paralysis  which  has  affected  the  rea- 
soning world,  while  these  results  of  these  doctrines  are 


4 


14  The  Labor  -  Value  Fallacy. 

being  worked  out  before  the  public  eyes.  Intelligent 
men  all  over  the  world  shudder  at  these  sights,  but  are 
dumb.  Aristocrats  tremble,  contrive  more  terrible  pen- 
alties, and  make  martyrs  of  the  fanatics.  Men  of  peace 
and  property  everywhere  look  with  apprehension  into 
the  future,  and  hope  the  present  organization  of  society 
will  last  out  their  time.  But  no  where  is  there  a  voice 
raised  to  say,  that  this  crusade  against  society  is  based 
upon  a  cunning  falsehood,  which  will  prove  an  eco- 
nomic absurdity,  whenever  brought  to  a  practical  test. 

The  following  is  the  argument,  which  leads  from  the 
admission  that  all  wealth  springs  from  labor,  to  the  jus- 
tification of  the  annihilation  of  civilization,  by  a  chain 
whose  links  are  too  strong  to  be  easily  broken  : 

All  wealth,  that  is  everything  which  has  exchangeable 
value  is  created  by  labor.  Then  everything  not  created 
by  labor  has  no  exchangeable  value  and  is  not  wealth. 
But  many  things  not  created  by  labor  are  bought 
and  sold  and  treated  as  wealth.  It  follows  that 
traffic,  in  things  not  created  by  labor,  is  a  wrong 
done  to  laborers.  All  things  not  produced  by  labor 
are  for  the  common  use  of  all  men.  That  indi- 
viduals should  be  permitted  to  appropriate  to  their 
own  exclusive  use  these  objects,  and  shut  out  other 
men  from  the  enjoyment  of  them,  is  a  monstrous  out- 
rage. To  put  an  end  to  this  wrong  is  the  aim  of  so- 
cialism. But  it  can  be  readily  seen  that  the  task  of 
remodeling  society  by  degrees  is  a  hopeless  one.  So 
intricately  is  this  great  so-called  wrong  woven  in  all  the 


The  Socialist  Argument.  15 

relations  of  men,  that  centuries  of  continuous  agitation 
can  not  be  expected  to'  eliminate  it.  There  is  logically 
and  consistently  nothing  to  be  done  but  to  destroy  the 
whole  fabric,  and  make  out  of  the  ruins  a  new  civiliza- 
tion, which  shall  know  no  wealth  but  that  created  by 
labor. 

In  the  view  of  the  sincere  socialist  mankind  will  be 
perfectly  prosperous  and  happy,  if  all  the  gifts  of  nature 
are  held  as  common  possessions,  and  if  a  benevolent 
common  government  supplies  the  wants  of  each  indi- 
vidual, while  expecting  each  to  create  value  for  the 
common  benefit,  according  to  his  ability.  Believing 
this,  and  seeing  poverty  and  misery  in  every  habitable 
land,  is  it  wonderful  that  the  earnest  socialist  proposes 
thorough  measures.  To  the  majority  of  persons,  who 
are  quiet,  law-fearing,  property-cherishing  citizens,  the 
anarchists  and  nihilists  seem  savage  beasts,  and  their 
doctrines  the  incomprehensible  malice  of  fiends.  But 
to  themselves,  it  can  not  be  doubted,  they  appear  self 
devoted  benefactors  of  the  human  race.  Their  enthu- 
siasm has  been  compared  by  a  careful  observer  to  that 
displayed  by  the  early  Christians,  when  they  looked 
hopefully  for  the  general  destruction  of  the  world,  and 
saw,  with  eyes  of  faith,  a  new  heaven  and  a  new  earth 
arise  from  the  burning  elements,  and  were  led  by  this 
vision  to  willing  martyrdom. 

It  is  remarkable  that  although  socialist  doctrines, 
based  on  the  labor  value  of  all  property,  have  been 
earnestly  advocated  by  many  able  and  sincere  men 


16  The  Labor  -  Value  Fallacy. 

such  as  Saint  Simon,  Owen,  Fourier  and  Marx,  for  more 
than  half  a  century,  they  have  produced  no  impression 
upon  the  organization  of  society.  As  far  as  I  can  dis- 
cover, there  has  been  no  change  or  modification  of  so- 
cial order  effected  by  socialist  sentiment,  and  yet  these 
sentiments  have  received  respectful  attention,  especially 
in  this  country,  and  have  been  adopted  and  put  to  prac- 
tical test,  at  one  time  or  another,  by  many  well  in- 
formed and  earnest  people.  Isn't  it  strange,  that  if 
there  is  any  thing  really  capable  of  improving  society 
in  socialism,  it  should  not  have  developed  by  this  time, 
and  been  made  use  of  ?  That  no  such  in  fluence  has  come 
from  socialist  discussions  is  pretty  good  evidence,  that 
no  beneficial  reforms  of  present  conditions  should  be 
looked  for  from  that  source.  It  is  evidence  also,  that 
the  extreme  socialists,  the  anarchists  and  nihilists,  are 
logically  correct  in  their  position.  Socialism  is  inca- 
pable of  modifying  existing  society  and  changing  its 
form  by  degrees.  The  only  consistent  socialist  is  he 
who  goes  to  the  root  of  the  matter  at  once,  and  desires 
the  total  destruction  of  all  property,  that  on  the  ruins 
of  civilization,  a  new  society  may  grow  up,  in  which  no 
property  will  be  permitted  to  exist,  which  will  not  ex- 
change according  to  the  quantity  of  labor  exerted  in 
producing  it.  The  only  mistake  the  anarchists  and 
nihilists  make  is  in  not  going  far  enough,  y  heir  pro- 
gramme is  incomplete,  in  leaving  human  nature  un- 
changed."} To  fully  accomplish  their  object,  they  need 
the  services  of  a  comet  or  of  a  glacial  epoch  to  wipe 
mankind  off  the  earth's  surface,  and  then  they  would 


Consistency  of  the  Anarchists.  17 

be  obliged  to  find  a*  new  creative  energy,  to  produce  a 
new  order  of  beings,  who  would  "  produce  according 
to  their  capacities  and  consume  according  to  their 
needs."  There  is  no  other  reform  radical  enough  to 
satisfy  the  demands  of  the  socialist  theories,  and  no 
less  thorough  measures  will  give  their  system  a  fair 
chance. 

The  anarchists  deride  their  half-hearted  brethren, 
who  merely  advocate  the  confiscation  of  private  owner- 
ship of  land,  for  the  inconsistency  and  the  inefficiency 
of  their  proposals.  They  sneer  equally  at  the  moder- 
ate (!)  idea,  which  is  now  cherished  by  probably  a  ma- 
jority of  the  workmen  of  France,  that  the  State  or  the 
municipalities  may  be  captured  by  the  exercise  of  the 
elective  franchise,  and  the  rate  of  wages  fixed  to  meet 
the  wants  of  the  laborers,  some  sort  of  penalty  estab- 
lished for  exceeding  the  regular  hours  of  labor,  and  a 
law  passed  that  work  (and  a  satisfactory  compensation) 
shall  always  be  furnished  to  those  desiring  it  by  some- 
body. The  anarchists  are  right.  These  reforms  can 
never  be  secured  by  peaceful  means,  and  can  never  be 
made  parts  of  the  present  systems.  The  whole  theory 
of  existing  governments  is  opposed  to  these  changes. 
If  carried  by  all  the  ordained  means  of  establishing 
laws,  not  one  of  these  propositions  could  be  success- 
fully put  into  effect.  They  would  fail  as  all  similar 
laws  have  heretofore  failed,  and  their  discouraged  pro- 
jectors would  then  have  no  refuge  for  their  hopes,  but 
in  anarchism  and  the  complete  demolition  of  all  gov- 
ernments. The  anarchists  are  acute  enough  to  see 


18  The  Labor -Value  Fallacy. 

this,  and  so  they  treat  all  these  moderate  counselings 
with  undisguised  contempt.  The  anarchists  are  the 
enthusiasts,  the  fanatics  of  socialism.  They  will  hesi- 
tate at  nothing,  if  a.  chance  for  action  presents  itself, 
and,  consistent  in  their  belief,  they  will  lead,  and  if  a 
temporary  advantage  is  gained,  the  mass  of  more  con- 
servative socialists  will  follow  them,  just  as  they  fol- 
lowed them  in  Paris  in  1871.  France  is  just  now  the 
field  in  which  these  demonstrations  are  most  likely  to 
be  made.  A  great  part  of  the  handicraftsmen  and 
many  of  the  agricultural  laborers  have  socialist  opin- 
ions. A  political  revolution  will  furnish  opportunity. 
The  anarchists  will  assume  control,  and  will  display 
a  reckless  energy,  which  Frenchmen  always  admire. 
They  will  be  followed  by  an  immense  army,  which  will 
wage  war,  in  all  the  large  cities  of  France,  not  only 
against  persons  but  against  property,  and  will  destroy 
with  a  wantonness  which  has  never  been  known  before. 
This  civil  war  will  end,  as  it  only  can  end,  in  the  res- 
toration of  order  in  a  desolated  land. 

This  is  all  likely  to  happen,  and  will  possibly  be  the 
next  important  event  in  the  record  of  socialism.  This 
is  all  caused  by  the  belief  that  all  value  is  created  by 
labor,  and  that  the  laborer  is  rightfully  the  owner  of 
the  products  of  his  labor.  If  these  propositions  are 
true,  the  socialist  mob  will  be  justified  in  reducing  to 
ruins  the  cities  of  France.  There  is  no  stopping  place, 
between  admitting  these  propositions  and  committing 
France  and  every  other  civilized  land  to  dynamite  and 
fire.  Is  not  this  sufficient  to  suggest  grave  doubts,  as 


Mild  Forms  of  Socialism.  19 

to  the  ability  of  labor  to  create  value  ?     Is  not  this  a 
sufficient  reditctio  ad  absurdum  ? 

The  tendency  to  socialism  is  probably  indicated  by 
the  desire  to  advise  rich  men  how  to  make  the  best  use 
of  their  property.  This  office  of  gratuitous  adviser  to 
the  wealthy  is  assumed  by  many  well-meaning  people, 
including  not  a  few  editors  of  newspapers.  These 
speak  with  the  air  of  authority,  as  if  they  had  some 
sort  of  public  commission,  and  threaten  dreadful  but 
indefinite  consequences  if  their  advice  is  not  followed. 
These  would  probably  disclaim  any  socialist  sympathy. 

The  mildest  form  of  acknowledged  socialism  is  prob- 
ably represented  by  the  proposition  to  compel,  by  une- 
qual taxation  or  otherwise,  the  owners  of  large  unoc- 
cupied estates  to  dispose  of  their  lands  or  open  them 
to  settlement.  I  think  the  beginning  of  socialism  may 
be  seen  in  an  inclination  to  make  the  burden  of  taxa- 
tion rest,  in  undue  proportion,  on  the  larger  owners 
of  property.  This  would  be  a  virtual  violation  of  the 
implied  contract  which  society  has  entered  into  with 
each  of  its  members,  which  stimulates  individual  exer- 
tion by  guaranteeing(equal  protection  to  all.}  It  would 
discourage  exertion  by  putting  aCtigma  on  good  for- 
tune and  success.) 

The  proposal  is  sometimes  made  that  large  incomes 
should  be  taxed  at  a  high  rate  for  the  avowed  purpose 
of  preventing  property  accumulating  in  single  hands. 
This  would  be  a  return  to  semi-civilized  methods,  such 
as  prevail  in  oriental  countries,  where  men  are  forced 


20  The  Labor-  Value  Fallacy. 

to  conceal  their  riches  from  the  rapacious  tax-gatherers,, 
in  order  to  avoid  confiscation. 

Bismarck  has  been  accused  of  socialist  tendencies, 
because  he  has  proposed  to  establish,  a  state  insurance 
of  support  to  workmen,  disabled  in  prosecuting  their 
craft.  But  this  may  be  explained,  as  a  measure  of  pub- 
lic policy  ;  and  such  a  system  might  and  probably  would 
be  administered  by  the  German  government,  so  that  it 
would  not  offer  a  reward  for  shirking.  It  can  easily  be 
imagined,  that  such  insurance  might  be  less  socialistic 
in  its  influence  than  the  old  poor  laws  of  England,  and 
might  become  a  beneficial  element  in  a  well  regulated 
industrial  society. 

There  are  a  considerable  number  of  professed  polit- 
ical economists,  who  are  not  ready  to  call  themselves 
socialists,  who  nevertheless  adhere  to  the  purely  social- 
ist doctrine,  that  inheritance  of  property  is  a  viola- 
tion of  the  rights  of  man.  J.  S.  Mill  took  substan- 
tially this  position,  led  to  it  by  the  assumption  that  the 
title  to  all  property  is  derived  from  labor.  It  follows 
that  the  law,  which  gives  to  the  son  property  for  which 
his  father  alone  labored,  confers  an  unjust  title.  This 
conclusion  must  follow  this  assumed  premise,  but  I 
hold  the  premise  to  be  wholly  false. 

The  first  landing  place  of  active  agitation  on  the  log- 
ical ladder  which  leads,  from  the  admission  that  all 
value  is  created  by  labor,  down  the  bottomless  pit  of 
socialism,  is  at  present  occupied  by  Mr.  Henry  George 
and  his  followers.  Mr.  George  writes  in  a  popular  and 


Henry  George  s  Socialism.    ^^*          21 

persuasive  manner,  and  his  writings  have  been  widely 
read.  His  plan  for  the  relief  of  the  poor  is  to  have 
the  State  take  possession  of  all  land  and  become  the 
universal  landlord,  applying  the  rents  received  to  the 
wants  of  the  needy.  This  idea  is  not  original  with 
Mr.  George,  but  he  presents  it  just  now  in  anew  dress, 
and  calls  it  "  the  nationalization  of  the  land."  It  is  an 
old  notion,  but  has  not  received  much  attention  here- 
tofore from  practical  men,  for  the  obvious  reason  that 
in  practice  it  would  multiply  indefinitely  the  number 
of  the  needy,  and  would  greatly  decrease  the  number 
who  would  be  willing  to  pay  rent. 

"  Nature  gives  wealth  to  labor,  and  to  nothing  but 
labor.  There  is  and  there  can  be  no  article  of  wealth 
but  what  labor  has  gained  by  making  it  or  searching 
for  it,  out  of  the  raw  material  which  the  Creator  has 
given  us  to  draw  from.  If  there  was  but  one  man  in 
the  world  it  is  manifest  that  he  could  have  no  more 
wealth  than  he  was  able  to  make  and  to  save.  This  is 
the  natural  order."  From  "  Problems  of  the  Time," 
by  Henry  George. 

This  is  Mr.  George's  fundamental  principle.  If  it 
is  admitted  there  is  no  use  in  denying  that  private  prop- 
erty in  land  is  unjustifiable.  But,  believing  this,  why 
does  Mr.  George  stop  with  this  demand  ?  Perhaps  he 
doesn't  like  the  looks  of  the  pit  below  him,  and  fancies 
that  mankind  will  be  able  to  stop  on  his  little  landing 
place.  But  he  is  greatly  mistaken.  The  inexorable 
ladder  leads  down  to  chaos.  Give  us  once  the  nation- 
alization of  the  land,  and  one  must  then  follow  the 


22  The  Labor -Value  Fallacv. 

footsteps  of  the  anarchist  and  the  nihilist  to  a  lower 
deep. 

The  next  important  point  to  which  a  formidable 
body  of  socialists  expect  to  carry  affairs  is  the  recogni- 
tion of  "  the  right  to  labor."  It  is  for  this  the  work- 
ingmen  of  France  are  now  pressing.  If  we  admit  that 
a  portion  of  the  soil  is  the  birthright  of  every  man,  we 
must  allow  that  society  in  taking  possession  of  the  soil, 
or  permitting  a  limited  number  to  take  possession  of  it. 
deprives  the  landless  of  their  rights.  As  a  compensa- 
tion for  this  deprivation — for  this  arbitrary  taking  away 
of  the  means  by  which  nature  intended  all  men  to 
obtain  support — society  must  provide  each  man  with 
an  occupation,  an  opportunity  to  labor,  by  which  he 
may  earn  a  comfortable  living.  This  is  "  the  right  to 
labor."  It  is  not  a  new  idea.  It  was  put  in  practice 
to  a  limited  extent,  but  with  most  disastrous  results,  by 
the  influence  of  Louis  Blanc  under  the  Republic  of 
1848.  More  than  anything  else  this  wretched  attempt 
to  force  the  State  to  support  the  artisans  of  Paris,  dis- 
gusted the  people  of  France  with  a  republican  form  of 
government  at  that  time,  and  prepared  their  minds  to 
accept  the  empire  of  Louis  Napoleon.  Events  are  moving 
in  similar  grooves  in  France  now.  The  French  people 
are  now  more  confirmed  in  republican  habits  of  thought, 
but  the  socialist  element  is  also  stronger  and  more 
hopeful.  The  workmen  expect  to  obtain  power  by 
their  votes,  and  they  propose  to  have  the  right  to  labor 
acknowledged,  and  a  law  passed  fixing  a  minimum  of 
wages,  and  forbidding  the  dismissal  of  laborers,  except 


French  Socialism. 


for  mutiny,  and  providing  that  the  State  shall  lend 
capital  to  great  corporations,  which  shall  undertake  the 
principal  branches  of  industry.  When  this  or  any  sim- 
ilar scheme  shall  be  taken  up  by  the  French  Republic, 
the  world  may  prepare  to  hail  another  Emperor 
of  France.  He  will  not  then  be  far  away,  although 
France  may  be  obliged  to  pass  through  fire  and  ruin  to 
find  him. 

It  cannot  fail  to  strike  the  curious  inquirer  as  sin- 
gular that  although  there  are  millions  of  men,  who 
believe  that  value  or  wealth  is  created  by  labor,  and 
that  the  title  to  all  wealth  should  be  in  the  laborers, 
who  have  produced  it,  that  no  community  or  state  has 
been  organized  successfully  on  this  principle.  It  is 
true  that  many  such  attempts  have  been  made,  but 
these  have  all  proved  total  failures,  with  the  exception 
of  one  or  two,  which  still  drag  out  miserable  existences, 
furnishing  illustrations  of  the  wretchedness  of  the  cause 
in  which  they  suffer. 

It  is  a  matter  of  surprise  too,  that  Mr.  Henry 
George,  having  doubtless  caused  much  mental  misery 
among  his  landless  readers,  does  not  attempt  to  satisfy 
the  longings  for  the  happiness,  which  is  to  be  obtained 
under  "  nationalization  "  of  land,  by  organizing  a 
colony  to  occupy  some  unappropriated  part  of  the 
earth's  surface.  If  Mr.  George  can  show  us  by  actual 
demonstration  how  a  community,  practicing  his  teach- 
ings, obtains  more  happiness  individually  and  collect- 
ively than  others,  he  will  have  done  more  to  convince 


24  The  Labor -Value  Fallacy. 

us,  than  by  printing  the  most  eloquent  appeals.  As  it 
is,  he  has  only  caused  a  great  deal  of  discontent,  and 
it  is  open  for  the  least  argumentative  questioner  to  re- 
fute him,  by  pointing  out  the  very  considerable  con- 
tentment and  happiness  which  can  be  seen  in  societies 
acknowledging  and  protecting  individual  ownership  of 
land,  and  challenging  him  to  show  better  results  under 
his  system.  The  fact  that  he  has  made  no  attempt  to 
do  so,  is  to  be  counted  against  him,  as  showing  lack  of 
faith  in  his  own  principles. 

During  the  last  century  the  civilized  world  has  been 
engaged  in  devising  and  celebrating  the  apotheosis  of 
labor.  Poets  have  sung  its  virtues.  Orators  have 
declaimed  its  merits.  Statesmen  have  done  it  honor. 
And  political  economists  have  fallen  down  and  wor- 
shipped it.  Far  be  it  from  me  to  treat  it  with  irrever- 
ence ;  but  I  wish  humbly  to  suggest  that  there  may  be 
other  gods  in  our  economic  pantheon,  and  that  possi- 
bly a  little  incense,  burned  before  some  of  the  other 
productive  powers  of  our  mundane  system,  may  be 
equally  well  consumed. 

Our  progenitors  in  prehistoric  times  adored  the  sun 
as  the  producer  of  all  good.  From  his  beams  they 
seemed  to  derive  all  benefits,  and  to  him  they  rendered 
all  praise.  Later  on,  in  the  dawn  of  history,  the  ele- 
ments became  the  fashionable  sources  to  which  to  ac- 
credit blessings.  Earth,  water,  fire,  air  were  all  per- 
sonified and  deified,  and  mankind  gave  to  them  respect- 
ful prayers  and  thanks  for  the  satisfaction  of  all  their 


The  Apotheosis  of  Labor.  25 

wants.  After  a  while  the  idea  of  deity  became  ele- 
vated, but  throughout  Christendom,  for  centuries,  there 
were  a  great  variety  of  saints  and  supernatural  agents 
to  whose  kind  offices  prosperity  and  good  fortune  were 
ascribed.  Just  at  the  beginning  of  the  commercial  era 
of  modern  times,  the  precious  metals  received  the  eager 
reverence  of  men,  as  the  wealth  containing,  if  not  the 
wealth  producing  powers.  And  when  these  lost  this 
exalted  station  in  the  estimation  of  men,  Quesnay  and 
the  physiocrats  raised  agriculture  to  the  high  place  of 
creator  of  all  value. 

This  is  not  by  any  means  an  enumeration  of  all  the 
objects  and  forces  to  which  homage  has  been  rendered 
in  return  for  the  possessions,  which  men  have  used  and 
enjoyed.  But  it  is  sufficient  to  show  that  there  has 
been  a  difference  of  opinion,  at  different  times,  as  to 
the  real  causes  of  wealth.  It  seems  to  show  also  that 
certain  popular  notions  have  prevailed,  to  the  exclusion 
of  all  others,  at  certain  periods.  Noticing  the  fallibility 
of  human  opinion  in  past  ages  may  suggest  a  doubt  as 
the  correctness  of  our  own  time's  belief. 

It  was,  no  doubt,  in  opposing  the  mercantile  theory 
and  the  agricultural  theory  that  Adam  Smith  suggested 
that  labor  was  the  first  price  paid  for  all  things.  The 
world  was  in  the  mood  to  take  up  and  exalt  labor. 
The  author  of  the  "Wealth  of  Nations"  struck  a  respon- 
sive cord.  Labor  had  been  from  the  foundation  of  the 
world  overlooked  and  despised.  Invention  was  then 
beginning  to  furnish  new  means  of  satisfying  desires. 
Commerce  was  developing  new  avenues  of  activity, 


26  The  Labor -Value  Fallacy. 

new  regions  of  the  earth's  surface,  and  new  political 
ideas.  It  was  fitting  that  labor  should  be  treated  with 
greater  respect,  and  be  lifted  to  a  more  important  place 
in  the  calculations  of  men.  An  era  of  progress  in 
industry,  hitherto  undreamed  of,  was  commencing. 

The  importance  of  the  suggestion  made  by  Adam 
Smith,  at  that  time,  can  hardly  be  over-estimated.  It 
gave  a  philosophical  basis  to  the  economic  progress  of 
the  civilized  world.  But  the  time  will  come,  if  it  has 
not  already  come,  when  the  world  may  ask  to  its  ad- 
vantage, if  there  are  not  other  elements  of  progress 
which  deserve  its  attention,  andfwhether  there  is  not 
danger  of  reaching  a  pernicious  extreme  and  subordi- 
nating the  best  interests  of  society  to  the  demands  of 
the  self-conscious,  all-demanding  workingman  —  the 
spoiled  child  of  the  nineteenth  century/ 

I  am  far  from  believing  that  the  real  working  men 
of  this  country,  who  are  for  the  most  part  orderly,  con- 
tented citizens,  are  avowed  or  secret  socialists,  and  it 
is  only  of  those  who  are  members  of  socialist  organi- 
zations and  have  socialist  sympathies  of  which  I  now 
speak,  as  wishing  to  give  labor  a  pernicious  influence 
in  society.  But  I  hope  to  convince  all  candid  readers, 
that  the  best  interests  of  society  are  not  to  be  served 
by  unduly  exalting  labor  as  the  creator  of  all  value  ; 
but  that  a  society  in  which  there  are  many  grades  of 
individual  inequality, — in  which  each,  having  different 
accomplishments,  and  diverse  duties,  does  his  best  in 
his  particular  place,  is  the  highest  form  of  social  devel- 


Labor  and  Wealth  defined.  27 

opment,  and  that  in  which  each  enjoys  most  perfectly 
the  happiness  of  which  his  life  is  capable. 


I  have  endeavored  to  show  what  are  the  logical  con- 
sequences of  the  assumption  that  all  value  is  created  by 
labor.  I  will  now  try  to  prove  that  this  assumption  is 
false,  and  that  it  has  no  reasonable  foundation  in  human 
nature  or  in  fact. 

I  must  be  understood  as  using  the  term  labor,  in  the 
sense  in  which  it  is  generally  employed,  as  meaning 
manual  labor,  that  is  physical  exertion  directed  by  more 
or  less  mental  effort  and  put  forth  for  some  useful  end. 

By  the  term  value  I  mean  only  value  in  exchange, 
and  by  the  term  wealth,  the  aggregate  of  those  things 
to  which  value  in  exchange  attaches.  I  do  not  suppose 
that  anyone,  even  the  most  stubborn  socialist,  will  claim 
that  value  in  use  is  always  the  creation  of  labor,  or  that 
things  which  have  no  value  in  exchange  can  be  prop- 
erly called  wealth,  although  there  are  many  passages, 
in  the  writing  of  Mr.  Henry  George,  and  others,  which 
might  be  interpreted  to  have  this  signification. 

*  The  South- Sea  Islanders,  who  are  able  to  supply 
their  individual  wants  by  their  own  individual   exer- 

*  Captain  Cook  found  some  Australian  tribes  to  whom  the  idea  of  traffic 
seemed  unknown.     They  received  what  was  given  them  readily,  but  they  re- 
ceived it  as  a  present  only  ;  they  seemed  to  have  no  notion  of  giving  any  thing 
in  lieu  of  it. — Bagehot^  Economic  Studies,  pg  4.1. 


28  The  Labor  -  Value  Fallacy. 

tions,  have  nothing  to  exchange  with  each  other,  and 
consequently  have  no  wealth ;  but  when  a  European 
trader  comes,  and  offers  beads  for  their  cocoanuts, 
wealth  makes  its  appearance.  A  man  living  and  dying 
alone,  on  an  unvisited  island,  has  no  wealth,  although 
he  may  have  all  the  wants  supplied  and  many  posses- 
sions. This  word  is  used  very  loosely,  even  by  politi- 
cal economists.  It  is  frequently  employed  to  describe 
possessions  in  general,  without  reference  to  their  ex- 
changeable quality.  But  unless  it  can  be  held  to  apply 
only  to  those  possessions  which  have  value  in  exchange, 
it  loses  all  precision.  Air  and  water  are  possessions, 
which  have  value  in  u£e  but  no  value  in  exchange,  and 
should  be  reckoned  as  wealth,  if  wealth  is  not  limited 
to  things  which  have  value  in  exchange.  Mr.  George 
frequently  uses  the  term  wealth  in  this  befogging  sense, 
to  describe  things  having  value  in  use  but  no  value  in 
exchange.  He  has  done  so  in  a  passage  which  I  have 
previously  quoted,  but  I  do  not  think  that  he  will  con- 
tend that  it  is  its  proper  use. 

At  all  events,  I  am  gaining  no  unfair  advantage  for 
my  argument  by  confining  the  term  to  those  things  to 
which  value  in  exchange  attaches.  The  assertion  that 
all  things  which  have  value  in  use  are  produced  by 
labor  refutes  itself.  There  is  no  occasion  for  argument, 
unless  wealth  is  held  to  mean  only  those  articles  which 
have  value  in  exchange. 

I  have  searched  diligently,  in  works  on  political 
economy,  for  some  proof  that  value  in  exchange  is 
created  by  labor.  I  find  plenty  of  assertions  of  this 


Not  Found  in  Practice. 


dogma,  plenty  of  references  to  authority,  plenty  of  at- 
tempts to  illustrate  it  by  describing  the  doings  of  pri- 
meval men,  but  I  have  not  been  able  to  find  any  effort 
to  derive  this  supposed  rule  from  actual  observation  or 
experience.  1  have  tried  many  times  to  discover  in 
real  transactions,  in  the  most  simple  as  well  as  the  most 
complex,  what  influence  the  labor  which  had  been  em- 
ployed in  the  production  of  an  article  has  exerted  in 
determining  the  ratio,  in  which  it  could  be  exchanged 
for  other  articles.  But  with  all  my  efforts,  4  have  not 
found  a  single  instance,  in  which  the  price  demanded 
or  paid  for  any  thing  bore  any  ascertainable  relation 
to  the  labor  which  made  it.)  I  may  be  more  dull  than 
others  about  this.  I  have  often  concluded  that  I  must 
be  so  ;  but*  still  the  unguessed  riddle  would  not  leave 
me.  I  have  not  been  able  to  admit  to  myself  that  an 
accepted  axiom  in  economics  could  have  no  practical 
application.  But,  on  the  other  hand,  I  have  not  been 
able  to  find  any  working  illustration  of  this  one,  I  find 
its  influence  everywhere  in  theory,  but  nowhere  in 
practice.  It  is  indeed  frequently  brought  forward,  as 
a  specious  argument,  to  affect  prices.  A  manufacturer 
may  resort  to  it  to  induce  a  better  bid  for  his  product, 
or  a  merchant  may  plead  it  to  avoid  loss  on  his  wares. 
Its  use  is  a  favorite  artifice  among  auctioneers.  But  if 
its  use  occasionally  enables  an  expert  to  drive  a  better 
bargain,  the  trick  is  pretty  sure  to  succeed  only  in  sin- 
gle cases,  and  general  market  prices  are  not  affected 
thereby.  The  only  place,  where  it  seems  to  be  sin- 


30  The  Labor -Value  Fallacy. 

cerely  accepted  is  in  the  destructive  and  revolutionary 
plans  of  the  socialists. 

Let  any  graduate  of  any  of  our  many  colleges  start  out, 
with  the  teachings  of  his  professor  of  political  economy, 
and  the  definition  of  value  from  his  text  book  fresh 
in  his  mind,  and  engage  in  business  on  the  basis  that 
labor  creates  value.  He  will  find  many  things  selling 
for  more,  and  many  for  less  than  they  may  appear  to  be 
worth,  according  to  this  standard.  But  he  must  buy 
for  exact  labor-value  and,  adding  the  value  of  his  labor, 
offer  them  for  sale  at  the  exact  labor-value,  which  they 
have  acquired  in  his  hands.  If  he  should  carry  on  a 
profitable  business  on  this  basis,  he  would  furnish  an 
illustration  long  needed  in  political  economy.  But  no 
one  can  doubt  the  result  of  such  an  experiment.  A  lot 
of  rubbish  on  which  labor  had  been  wasted,  would  be 
accumulated  on  his  hands,  which  would  wait  in  vain 
for  purchasers. 

Let  any  mechanic,  who  has  been  persuaded  by  Mr. 
George's  writings  to  believe  that  value  is  created  by 
labor,  make  a  practical  test.  Let  him  rely  on  this  prin- 
ciple fully,  and  make  no  contract  for  his  remuneration 
before  completing  his  work.  But  let  him  turn  his  hand 
to  whatever  work  takes  his  fancy,  and  then  let  him  call 
on  the  world  to  come  and  buy  his  product,  at  a  price 
fixed  according  to  the  amount  of  labor  he  has  expended 
upon  it.  Will  his  appeal  bring  purchasers  ?  Will 
he  not  find  that  his  ability  to  exchange  the 
article  which  he  has  made,  for  money  or  for  any- 
thing else,  depends  solely  upon  its  adaptability  to  the 


Owens  Labor  -  Exchange.  31 

wants  of  some  one,  and  not  at  all  upon  the  labor  which 
he  has  expended  upon  it  ?  A  few  such  practical  trials 
of  the  first  principles  of  socialism  by  workingmen,  who 
have  been  attracted  by  the  promising  pictures  drawn 
by  socialist  agitators,  would  produce  a  very  good 
effect. 

A  very  amusing  account  is  given  in  Holyoake's 
"  History  of  Cooperation  "  of  several  attempts  about 
fifty  years  ago  to  establish  labor-exchanges.  These 
labor-exchanges  were  consistent  endeavors  to  carry  on 
trade  upon  the  theory  that  all  value  is  created  by  labor. 
It  was  prbvided  that  any  kind  of  commodity  could  be 
brought  to  the  exchange,  and  apprised  according  to  the 
amount  of  labor  expended  in  its  production.  Labor 
notes  were  then  issued  therefor,  the  unit  of  labor  being 
one  hour,  and  these  notes  were  receivable  in  the 
exchange  for  any  article  according  to  its  appraised 
price  in  labor  units.  Mr.  Robert  Owen,  the  wealthy 
philanthropist,  was  the  originator  and  chief  director  of 
the  most  important  of  these  labor-exchanges  in  Lon- 
don. He  provided  the  means  to  start  it,  and  gave  his 
time  to  the  superintendence  of  its  operations.  His 
popularity  brought  custom  to  it,  and  his  ability  gave 
the  experiment  the  best  possible  chance  of  success.  It 
carried  on  a  large  business  from  the  start,  and  at  first 
appeared  wonderfully  successful.  A  large  amount  of 
merchandise  appeared  on  its  shelves,  and  its  labor-notes 
were  circulated  quite  generally  in  the  neighborhood. 
These  notes  were  received  with  considerable  favor  by 


32  The  Labor  -  Value  Fallacy. 

local  tradesmen  in  exchange  for  their  goods,  and  it 
seemed  as  if  a  new  era  in  commercial  affairs  had 
dawned.  But  soon  it  began  to  be  perceived  that  the 
really  desirable  goods  were  disappearing  from  the 
shelves  of  the  Labor-Exchange.  The  local  tradesmen 
who  had  shown  so  much  favor  to  the  movement,  at 
the  outset,  had  succeeded  in  transferring  to  the  Labor- 
Exchange  their  unsalable  stocks,,  and  had  taken  away 
the  really  valuable  goods  which  the  enthusiastic  believ- 
ers in  labor-value  had  brought  in.  The  labor-notes 
began  to  depreciate,  and  fell  rapidly  into  discredit, 
when  it  was  found  that  little  remained  in  the  Labor- 
Exchange  worth  the  trouble  of  removing.  The  whole 
affair  came  to  an  end  in  less  than  thirty  days  after 
beginning  business.  There  were  labor-exchanges  on 
the  same  plan  started  about  the  same  time  in  Birming- 
ham and  Sheffield,  and  in  America,  in  Cincinnati  and 
New  Harmony  ;  but  all  of  these  seem  to  have  been 
miserable  failures  from  the  first. 

It  is  strange  that  these  very  well  known  efforts  to 
effect  exchanges  according  to  the  generally  received 
theory  of  value,  should  not  have  attracted  more  atten- 
tion. As  far  as  I  know  these  were  the  only  attempts 
of  this  sort  ever  made.  They  failed  miserably,  and  yet 
the  theory  remained  unshaken,  and  has  been  winning 
adherents  ever  since. 

I  think  if  any  one  analyses  the  elements  of  the  price  ot 
any  commodity,  (Price,  which  is  value  expressed  in  mon- 
ey terms,  affords  the  only  opportunity  for  accurate  obser- 


No  Labor-  Value  recognized  in  fixing  prices.      33 

vations  of  value.)  he  will  find  that  labor  employed  in 
production  bears  no  regular  nor  calculable  proportion 
to  the  quantity  of  gold,  for  which  the  commodity  may 
be  from  time  to  time  exchanged.  If  such  proportion 
cannot  be  discovered  and  stated  in  comprehensible 
language  or  figures,  I  claim  that  it  is  absurd  to  assert 
that  labor  determines  value,  and,  if  it  is  possible  to  be 
so,  it  is  still  more  idle  and  foolish  to  maintain  that  labor 
creates  all  value. 

I  think  that  it  will  be  acknowledged  by  any  one,  who 
studies  the  fluctuations  of  the  markets,  where  the 
important  commodities  of  commerce  are  bought  and 
sold,  that  the  wants  of  men  are  the  chief  influences 
which  determine  prices.  The  most  favorable  condi- 
tions for  studying  the  influences  by  which  prices  are 
made  are  furnished  by  the  great  exchanges,  in  which 
the  chief  commodities,  such  as  grain  or  cotton,  are 
traded  in.  Here  are  concentrated,  as  in  a  focus,  all 
these  influences,  and  men  of  keen  minds  and  wide  infor- 
mation are  giving  closest  attention  to  observe  their 
force  and  effects. 

No  scientist  gives  more  concentrated  thought  to  the 
object  which  he  holds  under  his  microscope,  than  do 
the  dealers  in  the  great  exchanges  give  to  the  course 
of  trade.  They,  if  any  men,  should  know  the  powers 
which  form  and  fix  prices,  and  if  there  is  any  agency 
which  creates  or  determines  value,  they  should  recog- 
nise and  appreciate  it. 

Let  the  student  of  value  go  on  the  floor  of  the  Board 
of  Trade  in  Chicago,  and  observe  what  influences  are 

3 


34  The  Labor -Value  Fallacy. 

regarded  as  important  in  determining  the  price  of 
wheat.  He  will  find  that  all  these  influences  may  be 
classed  easily  under  two  heads,  first,  and  perhaps  most 
important,  the  demand,  second,  the  supply.  If  he  is 
able  to  impart  any  information,  which  may  come  under 
either  of  these  heads,  he  will  be  listened  to  with  eager 
interest.  But  suppose  that  he  has  been  able  to  make 
an  accurate  calculation,  which  shows  the  amount  of 
labor  expended  in  producing  a  bushel  of  wheat,  and 
that  he  exhibits  this  valuable  contribution  to  economic 
science  to  the  members  of  the  Chicago  Board  of  Trade. 
He  will  find  that  no  one  has  any  time  to  spare  to  attend 
to  his  great  discovery,  and  that  it  will  have  no  more 
effect  on  the  course  of  prices  than  a  calculation  of  the 
ages  of  the  Pyramids. 

The  conclusion,  after  observing  the  opinions  of 
experts  in  prices  on  the  Board  of  Trade,  will  be  that 
prices,  and  consequently  values,  are  not  determined  by 
any  one  influence  or  class  of  influences.  They  are  as 
uncertain  as  human  life,  and  as  changeable  as  human 
opinion.  They  are  the  evidences  of  mental  actions, 
and  not  the  creations  of  physical  efforts. 

The  sap  which  swells  the  tree  does  not  create  the 
value  of  the  timber.  The  chemical  action,  which 
formed  the  coal  in  the  earth  and  the  iron  in  the  hills, ' 
made  them  exchangeable  for  wheat  and  corn,  but  did 
not  determine  their  value  in  exchange.  The  wind  and 
the  rain  and  the  sunshine  have  had  their  share  in  pro- 
ducing the  things  which  man  buys  and  sells  and  uses, 
but  have  had  no 'part  in  the  fixing  of  the  market  prices. 


Labor  a  Form  of  Energy.  35 

The  labor  of  beasts  has  rendered  man  service,  and  so 
has  the  labor  of  slaves,  but  neither  has  had  influence 
in  determining  how  those  services  exchange.  The  labor 
of  freemen  differs  in  no  economic  sense  from  the  labor 
of  slaves.  Each  accomplishes  its  result  according  to  the 
strength  and  skill  of  the  laborer,  and  without  reference 
to  his  political  rights  and  condition.  And  this  is  true 
through  the  whole  scale  of  labor,  from  the  lowest 
drudge  in  the  deepest  mine  to  the  professor  of  politi- 
cal economy  in  the  most  august  university.  It  is  the 
result  which  counts,  not  the  instrument.  The  freemen 
has  this  advantage  when  the  result  is  attained, — when 
the  product  of  his  labor  is  completed, — if  he  has  not 
already  sold  his  labor  or  his  product,  he  may  take  it 
into  the  market  and  do  the  best  he  can  with  it.  But  he 
will  find  there,  that  it  takes  two  to  make  a  bargain,  and 
that  the  labor  which  he  has  exerted  cuts  no  figure  in 
fixing  value,  unless  it  be  that  it  has  some  subordinate 
effect  on  his  own  feelings.  His  main  desire  and  his 
controlling  motive  will  be  to  obtain  for  his  product  that 
which  will  give  him  greatest  satisfaction,  and  on  this 
basis  the  sale  will  be  made. 

It  is  frequently  said,  that  cost  of  production  deter- 
mines value.%  It  seems  to  me  that  this  amounts  to  no 
more  than  saying,  that  the  value  of  a  compound  com- 
modity is  equal  to  the  sum  of  the  values  of  its  com- 
ponent parts.  This  may  be  approximately  true  within 
certain  narrow  limits.  If  there  is  no  considerable 
fluctuation  in  the  values  of  the  component  parts,  dur- 


36  The  Labor -Value  Fallacy. 

ing  production,  the  value  of  the  product,  at  the  com- 
pletion of  production,  will  probably  be  about  equal  to 
cost  of  production.  But  it  is  quite  improbable  that  the 
value  of  an  article,  completed  a  year  ago,  is  now  equal 
to  cost  of  production,  or  that  the  value  of  an  article, 
just  finished,  will  be  equal  to  cost  of  production  a  year 
hence. 

This  rule,  even  with  these  modifications,  has  many 
exceptions,  and  is  not  of  much  practical  importance. 
It  gives  no  opportunity  for  the  deduction  sometimes 
made  from  it,  that  therefore  labor  determines  value.  In 
those  organized  forms  of  production,  to  which  this  rule 
is  generally  applied,  the  labor  employed  is  treated  as  a 
commodity.  This  it  essentially  is  in  all  respects. 

Cost  of  production  never  determines  the  value  of 
agricultural  products,  or  of  railroad  transportation,  or 
of  any  commodity,  in  which  the  use  of  land  or  any 
article  not  capable  of  unlimited  reproduction  enters 
largely. 

Mr.  Henry  George  and  other  socialists  object  to 
treating  labor  as  a  commodity.  They  give  no  reason 
for  this  objection,  but  seem  to  regard  such  a  considera- 
tion of  labor  as  a  desecration  of  a  holy  subject.  I 
cannot  see  that  labor  has  any  place  in  political  economy 
except  as  a  commodity.  It  is  bought  and  sold  and 
exchanged  with  other  commodities,  and  the  attempt  to 
invest  it  with  a  different  character  has  produced  a  great 
deal  of  confusion.  Man,  as  a  laborer,  has  the  same 
position  in  economics  as  any  other  machine  through 
which  productive  force  is  exerted.  But  man  as  a  rea- 


UNIV 

w 

Production.  >  37 


soning  being,  having  a  soul  and  a  vote,  is  entirely 
another  thing,  and  is  not  treated  of  in  political 
economy. 

Labor  figures  in  cost  of  production  as  a  commodity, 
and  exercises  no  more  influence  in  the  price  of  the  pro- 
duct, than  does  the  cost  of  the  raw  material  or  the 
machinery.  And  the  influence  of  the  values  of  these 
component  parts  is  not  direct  and  absolute  in  determin- 
ing the  value  of  the  product,  but  only  indirect  upon 
the  minds  of  men  and  thus,  by  affecting  their  judg- 
ments, upon  the  value.  If  any  articles  have  been 
manufactured  at  a  certain  cost,  under  existing  condi- 
tions, men  suppose  that  more  can  be  made  while  those 
conditions  continue,  at  the  same  cost,  and  consequently 
will  not  pay  much  more,  unless  there  is  some  urgency 
in  the  want;  and  the  manufacturer,  believing  that  the 
demand  for  his  product  will  continue,  will  not  sell  below 
the  cost  of  replacing  it.  This  I  think  is  a  correct 
analysis  of  the  way  in  which  cost  of  production  affects 
price,  and  it  gives  no  ground  for  asserting  that  labor 
determines  value. 

The  claim,  which  is  set  up  in  many  works  on  polit- 
ical economy,  that  the  earliest  exchanges  made  were 
effected  according  to  quantities  of  labor,  which  the  first 
men  put  forth  in  taking  possession  of,  or  putting  in 
useful  shape,  the  first  rude  articles  of  personal  prop- 
erty, seems  hardly  worthy  of  attention.  But  the  brains 
of  eminent  men,  such  as  Ricardo  and  Adam  Smith 
have  engaged  in  drawing  these  imaginative  pictures, 


38  The  Labor -Value  Fallacy. 

and  they  doubtless  have  some  influence  on  general 
thought.  I  cannot  find  any  warrant  for  these  idyls  of 
the  prime.  The  most  careful  research  into  ancient 
record  and  tradition  has  not  brought  to  light  any  evi- 
dence, that  early  exchanges  were  made  on  such  a  basis. 
There  has  been  no  savage  tribe  discovered  in  which 
any  such  system  of  "  natural "  trade  is  recognized.  On 
the  contrary,  the  very  extensive  examinations  of  primi- 
tive customs,  made  by  Sir  Henry  Maine  and  M.  de 
Laveleye,  have  shown  that  the  first  men  of  whom  we 
have  traces,  were  not  traders  at  all.  Human  beings  in 
the  early  ages  knew  no  way  of  acquiring  property  from 
others  but  by  force.  Savage  life  has  always  been  a  life 
of  warfare.  Peaceful  exchange  is  a  product  of  dawn- 
ing civilization;  and  all  the  exchanges  since  then  have 
been  made  to  satisfy  wants.  It  is  highly  improbable, 
therefore,  that  any  men  ever  existed  anywhere,  who 
bartered  with  each  other,  according  to  quantity  of 
labor.  It  is  only  in  modern  times  that  labor  has  been 
so  systematized,  and  so  subjected  to  measurement,  that  it 
could  be  compared  in  quantities,  consequently  no  such 
comparisons  could  have  been  made  in  rude  ages. 

Colins,  the  Belgian  socialist,  has  proposed  to  reduce 
this  problem  to  its  simplest  terms — a  naked  man  and  a 
planet — and  thus  show  that  all  wealth  is  created  by 
labor.  If  the  planet  may  be  supposed  as  naked  as  the 
man,  the  problem  would  very  soon  solve  itself,  and  the 
solution  would  be  a  dead  man  and  a  planet.  If  the 
planet  is  supposed  supplied  with  an  agreeable  climate 
and  plenty  of  fruits  and  pleasant  things,  the  naked  man 


A     Naked  Man  and  a  Planet.  39 

might  get  on  very  comfortably,  but  he  would  have  no 
wealth,  because  his  most  enjoyable  possessions  would 
be  too  far  from  market,  and  would  have  no  exchange- 
able value.  The  transportation  rates,  from  the  naked 
man's  planet  to  the  earth,  would  be  more  than  the  busi- 
ness would  bear.  But  suppose  there  were  two  naked 
men  started  on  an  agreeable  planet.  Would  their  in 
stincts  lead  them  at  once  to  establish  a  labor  exchange  ? 
I  think  not.  They  would  either  form  a  primitive  part- 
nership and  have  all  things  in  common,  or  one  would 
become  the  slave  of  the  other,  or  they  would  find  that 
their  dispositions  were  uncongenial.  In  the  latter  case 
one  would  either  kill  the  other,  or  they  would  select 
separate  hemispheres  for  their  habitations.  In  fact,  I 
think,  about  the  last  thing  to  suggest  itself  would  be 
the  possibility  or  utility  of  making  a  trade  of  some  sort. 
But  all  such  speculations  are  idle,  and  prove  nothing 
either  way.  We  have  not  solitary  naked  men  on  iso- 
lated planets  to  deal  with,  but  many  millions  of  men 
on  a  highly  organized  earth.  There  is  a  great  deal  of 
comfort  and  happiness  enjoyed  by  these  millions  of 
men,  and  not  a  little  of  it  is  due  to  the  high  organiza- 
tion of  the  society  in  which  we  all  make  a  living.  It  is 
much  better  for  us  to  study  the  principles  of  this  or- 
ganization, that  we  may  preserve  and  improve  it,  rather 
than  contrive  imaginary  cases  of  imaginary  beings  to 
encourage  us  to  despise  and  destroy  it. 


40  The  Labor -Value  Fallacy. 


The  pernicious  influence  which  the  fallacy  that  all 
value  is  created  by  labor,  exerts  over  all  thought  at  the 
present  time  might  be  illustrated  by  innumerable  quo- 
tations, from  all  classes  of  writers.  The  deductions  from 
this  false  premise  appear  on  all  sides.  We  have  them 
from  pulpits  ;  we  find  them  taught  in  the  public  schools. 
We  read  them  in  all  the  newspapers,  and  in  all  sorts  of 
publications.  They  appear  in  the  messages  of  Presi- 
dents and  in  the  addresses  of  Prime  Ministers.  Con- 
gressional documents  abound  with  them,  and  political 
speeches  are  full  of  them.  I  have  thought  of  making 
a  collection  of  the  most  extraordinary  outcroppings  of 
this  capital  error.  I  could  easily  fill  a  volume  with 
such  quotations,  and  that,  too,  from  the  utterances  of  the 
most  prominent  men  of  the  day.  Strange  reading  such 
a  volume  would  seem  a  hundred  years  hence,  when,  it 
is  to  be  hoped,  the  socialist  question  will  have  been 
finally  disposed  of,  and  the  world  will  be  riding  some 
other  hobby.  It  would  show  that  even  the  greatest 
men  have  a  parrot-like  way  of  using  words,  which  they 
hear  others  use,  and  that  few  take  the  trouble  to  exam- 
ine into  the  significance  of  popular  expressions.  One 
of  the  most  common  and  most  obvious  of  these  deduc- 
tions, that  the  title  to  all  property  is  justly  vested  in 
the  laborers,  I  will  endeavor  to  consider  briefly. 

I  would  like  to  quote  a  whole  chapter  from  J.  S. 
Mill's  Political  Economy  on  this  point,  but  I  will  for- 


/.  S.  Mill's   Views.  41 

bear  and  content  myself  with  a  few  of  the  opening  sen- 
tences, which  I  think  fairly  represent  his  views.  He 
says  : 

"  The  institution  of  property  when  limited  to  its 
essential  elements  consists  in  the  recognition  in  each 
person  of  a  right  to  the  exclusive  disposal  of  what  he 
or  she  have  produced  by  their  own  exertion,  or  received 
either  by  gift  or  by  fair  agreement  without  force  or 
fraud  from  those  who  produced  it.  The  foundation  of 
the  whole  is,  the  right  of  producers  to  what  they  them- 
selves have  produced.  It  may  be  objected,  therefore, 
to  the  institution  as  it  now  exists  that  it  recognizes 
rights  of  property  in  individuals  over  things  which  they 
have  not  produced." 

Mr.  Mill  was  judicious  in  his  use  of  words,  and  care- 
fully modified  any  expression  which  might  be  con- 
strued as  bearing  too  harshly  on  established  institu- 
tions, but  he  is  forced  by  this  definition  of  property  to 
deny  the  right  of  inheritance,  and  the  right  of  the  land- 
lord to  the  so  called  "  unearned  increment "  in  the 
value  of  the  land.  He  shows  doubt  as  to  the  justice 
of  both  of  these  in  this  chapter. 

It  is  interesting  to  compare  with  this  calm  utterance 
of  a  philosopher,  the  opinions  of  the  members  of  the 
Mano  Nera,  the  Black  Hand,  of  Spain.  They  say  in 
their  programme,  issued  before  the  last  effort  to  assas- 
sinate those  of  their  neighbors  whom  they  thought 
better  off  than  themselves, 

"All  property  acquired  by  the  labor  of  others,  be  it 
revenue  or  interest,  is  illegitimate  ;  the  only  legitimate 


42  The  Labor  -  Vahie  Fallacy. 

possessions  are  those  which  result  directly  from  per- 
sonal exertions.*' 

This  is  not  quite  so  well  expressed,  but  it  means  the 
same,  as  Mr.  Mill's  words,  and  I  do  not  see  how  Mr. 
Mill  could  severely  criticize  the  assassins. 

Mr.  Mill  was  considerate  and  kind.  He  had  no  san- 
guinary or  revolutionary  spirit.  Having  stated  his  the- 
ories, such  as  his  labor-theory  of  value,  or  this  theory 
of  the  right  of  property,  he  modified  them,  and  modi- 
fied them,  until  they  fitted  pretty  comfortably  with  ex- 
isting facts.  Some  of  his  followers,  however,  are  not 
so  circumspect.  They  have  adopted  his  theories,  with- 
out the  modifications,  and  they  insist  upon  having  the 
facts  fitted  to  them. 

M.  de  Laveleye  says  that  Locke,  the  philosopher, 
was  the  first  to  state  clearly  the  theory  that  labor  is  the 
basis  of  property,  and  Locke  drew  from  this  theory 
the  following  conclusion,  which  is  not  only  a  logical 
deduction,  but  is  well  developed  socialist  doctrine  : 
"  Every  one  ought  to  have  as  much  property  as  is  nec- 
essary for  his  support." 

M.  Thiers  in  his  book  "  De  la  Propriete"  adopts  and 
states  this  theory  most  emphatically.  "  To  every  one," 
he  says,  "  for  his  labor,  because  of  his  labor  and  in  pro- 
portion to  his  labor.  We  may,  therefore,  say  dogmat- 
ically, the  indestructible  basis  of  the  right  of  property 
is  labor."  M.  de  Laveleye,  commenting  on  this,  says: 
"  It  may  be  said,  that  labor  ought  to  be  the  source  of 


No   Title  by  Labor  known  in  Law.  43 

all  property,  but  this  principle  would  be  condemnatory 
of  the  existing  organization  of  society." 

In  examining  this  subject,  I  have  been  astonished 
and  almost  overwhelmed  by  the  number  and  weight  of 
the  names  of  modern  authorities,  who  have  given  their 
unqualified  approval  to  this  doctrine.  I  have  been  sur- 
prised beyond  measure,  also,  that  none  of  these  great 
and  good  men  seem  to  have  realized  that  in  adopting 
this  theory  they  were  proclaiming  that  the  whole  fabric 
of  society  everywhere  is  a  monstrous  fraud,  and  justi- 
fying its  total  annihilation.  But  I  have  been,  if  pos- 
sible, more  completely  non-plussed  by  not  being  able 
to  find  the  slightest  evidence  of  the  truth  of  this  doc- 
trine in  law  or  tradition  or  custom,  in  nature  or  in  rev- 
elation. Where  can  the  doctrine  have  come  from  ? 
What  are  its  sanctions  ? 

The  lawyers  know  nothing  of  it.  There  is  no  hint 
of  it  in  any  of  the  codes,  and  neither  the  civil  law  nor 
the  common  law  shows  any  trace  of  it.  There  are 
many  kinds  of  title  known  to  the  law,  but  the  title 
by  labor  is  not  one  of  them.  (Unless  it  be,  perhaps 
that  patent  and  copyright  laws  can  create  for  limited 
periods  title  by  intellectual  labor)  There  is  title  by 
occupancy,  title  by  possession,  title  by  conquest,  title 
by  discovery,  title  by  descent,  title  by  purchase,  title 
by  gift — these  all  have  been  recognized  and  more  or 
less  respected,  from  time  immemorial.  If  labor  had 
any  part  in  creating  any  of  these  legal  titles,  is  it  not 
strange  that  there  should  be  no  evidence  of  it  ?  Is  not 


44  The  Labor  -  Value  Fallacy. 

the  conclusion  unavoidable,  that  if  labor  creates  the 
only  rightful  title,  the  whole  body  of  the  law,  ancient 
and  modern  is  founded  in  injustice  ?  And  does  it  not 
seem  more  reasonable,  that  the  law  by  which  the  rela- 
tions of  men  for  generations  and  centuries  and  ages 
have  been  controlled,  is  worthy  of  more  respect,  than 
a  sentiment  of  modern  philosophy,  which  has  never  had 
any  standing  or  influence  in  practice  ? 

There  is  no  recognition  or  suggestion  of  the  title  by 
labor  in  custom  or  tradition.  Since  Locke  wrote  on 
civil  government,  what  amounts  to  a  new  department  of 
human  knowledge  has  been  opened  by  investigation 
into  the  manners  and  customs  of  ancient  peoples.  And 
even  since  John  Stuart  Mill's  work  on  Political  Econ- 
omy appeared,  a  most  extraordinary  addition  has  been 
made  to  our  knowledge  of  antiquity.  Of  all  those  who 
have  contributed  to  this  new  knowledge,  Sir  Henry 
Sumner  Maine,  probably  stands  first  among  English 
writers.  His  books  are  remarkable  in  that  they  draw 
few  conclusions,  but  give  many  facts.  They  do  not 
dogmatically  assert  that  the  dwellers  in  the  twilight  of 
history  thought  thus  and  so,  but  they  exhibit  all  the 
evidence,  and  leave  the  reader  to  draw  such  inferences 
as  seem  warranted.  I  have  read  Sir  Henry  Maine's 
books  with  care,  and  I  have  not  been  able  to  discover 
a  single  suggestion,  that  it  ever  occurred  to  a  primitive 
man  that  labor  gave  any  title  whatever  to  property. 

The  notions  of  property  possessed  by  the  first  rude 
men,  of  whose  existence  we  find  faint  traces,  were 


Ancient  Custom.  45 


very  simple  compared  with  our  own  ideas.  But  they 
were  not  antagonistic  to  ours.  Our  habitual,  almost 
intuitive,  practices  concerning  property  are  but  refine- 
ments and  developments  of  the  earliest  conceptions  of 
property  rights,  as  described  by  Sir  Henry  Maine. 
He  is  of  the  opinion  that  the  patriarchal  theory  of  prim- 
itive life  is  the  correct  one.  That  is,  that  men  at  first 
associated  in  families,  and  'that  each  family  group  was 
subject  to  the  authority  of  the  parent  or  eldest  male 
representative  of  the  parent.  This  life  may  have  orig- 
inally been  as  savage  as  that  of  wild  beasts  in  their  dens. 
From  so  low  a  point  the  organization  of  modern  society 
may  have  begun.  The  earliest  rules  concerning  prop- 
erty seem  to  have  been  for  protecting  the  ownership  of 
domestic  animals.  Land  was  a  secondary  matter,  for 
there  was  plenty  of  it,  but  the  flocks  and  herds  were 
the  objects  of  desire  and  contention.  These  animals 
were  the  property  of  the  family,  or  rather  of  the  head 
of  the  family,  and  each  of  the  family  whether  natural 
kinsman  or  a  member  of  the  group  by  adoption,  de- 
fended the  flocks  and  tended  them,  and  took  his  part 
in  the  common  fortunes.  Those  families  or  tribes, 
which  subsisted  largely  by  hunting,  probably  appro- 
priated certain  territory  and  punished  with  death  the 
intrusion  within  their  limits  of  any  other  hunters.  Sir 
Samuel  Baker  found  the  country  near  the  sources  of 
the  Nile  divided  in  this  way,  with  well  defined  bounda- 
ries between  many  small  tribes.  Similar  notions  as  to 
hunter's  right  to  special  ground  were  common  among 
the  North  American  Indians. 


46  The  Labor  -  Value  Fallacy. 

The  right  of  ownership  by  conquest  was  early  recog- 
nized. The  property  of  enemies,  even  their  persons, 
belonged  without  question  to  the  victors.  It  is  proba- 
ble that  the  early  transfers  of  property  were  all  effected 
by  conquest.  There  is  no  evidence  of  individual  own- 
ership of  property  among  primitive  men.  The  earliest 
transfers  of  property  by  agreement  took  place  between 
families.  It  is  conjectured  that  the  first  articles  of  in- 
dividual property  were  arms  or  clothing.  According 
to  early  Roman  law,  horses,  cattle,  slaves  and  land  were 
all  held  by  the  same  tenure,  and  could  only  be  trans- 
ferred with  peculiar  ceremonies,  indicating  that  they 
were  all  regarded  as  the  common  property  of  the  fam- 
ily or  tribe,  and  could  only  be  alienated  by  common 
consent. 

From  these  rude  origins  the  right  of  property  devel- 
oped its  various  modern  forms.  The  general  advantage 
seems  to  be  the  force  which  has  produced  the  succes- 
sive modifications.  There  is  no  sign,  that  through  the 
whole  progress,  the  right  of  the  laborer  to  the  product 
of  his  labor  has  ever  been  respected  or  even  asserted. 
When  men  became  sufficiently  intelligent  to  live  peace- 
ably together  in  large  communities,  the  advantage  of 
individual  ownership  became  evident.  I  have  no  doubt 
that  under  individual  ownership  land  became  more  pro- 
ductive, cattle  more  carefully  tended,  and  the  state 
more  prosperous.  Individual  land  owners  proved  more 
energetic  citizens  in  devising  good  government,  and 
braver  and  more  persistent  soldiers  in  resisting  invasion 
or  pushing  conquests.  There  is  good  ground  for  be- 


Effect  of  Title  by  Labor  upon  Society.  47 

lieving  that  the  law  of  the  survival  of  the  fittest  forced 
the  adoption  of  individual  ownership  of  land  and  other 
property  upon  mankind.  But  this  process  of  change 
left  so  much  of  the  old  primitive  law  of  property  as 
could  not  be  destroyed  without  disadvantage  to  society, 
notably  the  remnant  of  parental  authority,  and  the 
principle  of  inheritance. 

The  development  of  custom  is  a  very  attractive 
field,  and  much  more  might  be  said  to  show  that  the 
labor-value  theory  of  property  has  thus  far  had  no  part 
in  shaping  man's  progress  from  the  companionship  with 
wild  beasts  to  his  present  improved  condition.  I  think 
I  have  said  enough  to  convince  any  fair  minded  person 
that  this  is  the  fact.  Whether  man  would  have  been 
better  or  worse,  if  at  any  point  of  his  progress  this 
theory  had  influenced  him,  is  a  matter  of  speculation 
purely.  Of  this,  however,  would  society  be  benefited 
by  it  ?  I  think  we  of  the  present  age  should  be  well 
assured  before  allowing  this  theory  to  modify  or  change 
our  institutions.  It  seems  tome  that  its  general  adop- 
tion would  dissolve  all  the  bands  of  common  custom, 
would  unloose  all  the  time-honored  ties  of  social  rela- 
tions, would  destroy  the  growth  of  centuries,  would 
substitute  anarchy  for  order,  would  make  it  impossible 
for  one  man  to  exist  where  ten  now  find  subsistence, 
and  would  send  those  that  remained  of  the  race  back 
to  live  in  caves  and  to  contest  with  animals  for  the 
fruits  of  the  earth. 

It   may    be    that  some   readers  will  construe  the 


The  Labor-  Value  Fallacy. 


emancipation  of  laborers  as  the  recognition  of  the 
laborer's  title  to  the  product  of  his  labor.  But  this  is 
not  warranted.  The  emancipation  of  laborers  was 
brought  about  by  the  same  causes  which  produced  in- 
dividual ownership  of  land.  The  general  advantage  of 
society  was  served,  at  the  periods  in  which  the  several 
modifications  of  law  and  custom  were  developed. 
Society  became  more  prosperous  with  the  growth  of 
individual  right  to  property,  and  still  further  increased 
in  prosperity  when  it  was  conceded  that  manhood 
meant  the  responsibility  of  freemen.  But  it  is  not  by 
any  means  the  same  thing  to  say,  that  man  is  free  to 
choose  how  he  will  spend  his  time  and  his  energies,  and 
to  say,  that  he  has  a  clear  title  to  the  product  of  his 
labor.  He  may  control  his  own  powers,  but  he  cannot 
control  their  effects. 

If  his  labor  is  expended  upon  his  own  property,  he 
owns  the  product,  but  if  on  the  property  of  another, 
he  has  no  title  to  the  product.  The  title  to  the  product 
invariably  follows  the  title  to  the  material.  This  is  the 
rule  everywhere.  Let  us  suppose  this  rule  reversed  and 
the  title  to  the  product  vested  in  the  laborer  rather  than 
in  the  owner  of  the  raw  material.  The  dullest  imagina- 
tion can  see  that  a  state  of  affairs,  such  as  never  has 
existed,  would  make  its  appearance.  Society  would 
unravel  like  a  web  whose  chief  thread  had  been  cut. 

The  laborer  may  sell  his  labor,  but  if  he  puts  it 
forth  without  a  previously  made  or  implied  contract,  it 
is  no  longer  salable.  He  may  bargain  to  sell  his  labor 
while  it  remains  in  his  control,  as  he  may  any  other 


The  Emancipation  of  Laborers.  49 

commodity.  In  the  early  state  of  society  he  could  not 
do  this.  His  labor  then  was  due  to  the  family  or  com- 
munity of  which  he  was  a  member,  and  his  family  or 
community  accorded  to  him  a  share  in  its  fortune. 
When  society  realized  that  the  general  fortune  would 
be  much  improved  if  men  were  left  to  shift  for  them- 
selves, the  laborers  were  emancipated.  The  emanci- 
pated laborer  acquired  the  right  to  dispose  of  his  own 
labor,  but  he,  at  the  same  time, assumed  the  risk  of  his 
own  support.  This  new  condition  is  undoubtedly 
highly  beneficial  to  general  society. 

Stimulated  to  exertion  by  the  necessity  of  provid- 
ing his  own  support,  and  by  the  promise  of  greater 
comfort  and  enjoyment  if  he  excels  others,  man  has 
become  violently  competitive.  There  was  little  or  no 
competition  between  individuals  in  patriarchal  society. 
It  is  individual  competition  which  has  changed  all  the 
condition  of  life,  and  transformed  the  face  of  the  habi- 
table globe.  It  is  this  which  furnishes  food  in  abund- 
ance for  ten  times  the  number  of  human  beings, 
which  the  patriarchal  age  could  have  supported. 

Now  and  then,  there  may  possibly  be  found  a  person, 
who  would  be  glad  to  exchange  his  individual  freedom 
in  the  nineteenth  century,  for  a  place  in  the  tents  of 
Abraham  or  in  the  caves  of  the  Cyclops.  There  is  noth- 
ing to  be  said  in  argument  with  such  persons.  Man 
cannot  choose  his  birthplace  or  his  birthright.  It  only 
remains  for  him  to  make  the  best  of  the  fortune  which 
falls  to  him.  If  there  is  anywhere  at  the  present  time 
any  man  so  friendless  and  poverty  stricken  and  unfor- 


50  The  Labor -Value  Fallacy. 

tunate,  that  having  the  ability  he  can  find  no  opportun- 
ity to  earn  his  bread,  it  is  truly  pitiful.  But  it  is  a  case 
for  pity,  not  for  wrath  against  the  institutions  of 
society. 

Inequality  in  the  conditions  of  men  has  not  been 
removed  by  the  development  of  individual  liberty.  It 
has  been  rearranged,  on  what  we  are  bound  to  believe 
a  juster  basis.  The  inequality  in  social  conditions  is 
possibly  greater  to-day,  than  in  the  most  brutal  days  of 
slavery  and  serfdom.  But  to  say  this  is  not  to  condemn 
society. 

The  appeal  to  nature  is  the  favorite  recourse  of 
modern  advocates  of  the  right  of  the  laborer  to  the 
product  of  his  labor.  I  can  produce  many  instances  of 
this  appeal,  but  I  will  content  myself  with  two  or  three 
quotations  from  Henry  George's  book,  "  Progress  and 
Poverty." 

"  Thus  there  is  to  everything  produced  by  human 
exertion  a  clear  and  indisputable  title  to  exclusive  pos- 
session and  enjoyment  which  is  perfectly  consistent 
with  justice,  as  it  descends  from  the  original  producer 
in  whom  it  is  vested  by  natural  law." 

"  Hence  as  nature  gives  only  to  labor,  the  exertion 
of  labor  in  production  is  the  only  title  to  exclusive  pos- 
session." 

"  It  is  a  strange  and  unnatural  thing  that  men  who 
wish  to  labor  in  order  to  satisfy  their  wants  cannot  find 
the  opportunity." 


Nature  and  Natural  Law.  51 

There  are  many  more,  but  these  are  sufficient  to 
show  the  character  of  the  appeal. 

I  do  not  know  exactly  what  is  Mr.  George's  concep- 
tion of  nature  and  of  natural  law,  but  it  is  evidently  a 
work  of  the  imagination,  and  not  at  all  founded  on  fact. 
The  philosophers  of  the  last  century  amused  them- 
selves and  their  sentimental  admirers  by  describing 
man  in  a  state  of  nature.  By  this  they  meant  a  sort  of 
idyllic  paradise,  where  imaginary  beings,  endowed  with 
imaginary  attributes,  conducted  themselves  according 
to  an  imaginary  set  of  rules,  which  they  were  pleased 
to  call  perfect  justice  or  natural  law.  If  Mr.  George 
refers  to  these  well  known  fairy  tales,  his  reference  is 
intelligible  and  consistent,  but  it  hardly  furnishes  a  se- 
rious foundation  for  an  argument. 

But  if  Mr.  George  means  by  nature  "  the  veritable 
system  of  things  of  which  we  ourselves  are  a  part,"  or 
by  natural  law,  that  unchanging  law  by  which  all  things 
exist,  and  in  accordance  with  which  we  live  and  move 
and  have  our  being,  he  is  speaking  without  sufficient 
consideration.  The  law  of  gravitation  and  the  law  of 
the  impenetrability  of  matter  are  natural  laws.  Mr. 
George  is  surely  very  hasty,  if  he  means  that  the  title 
to  property  is  vested  in  the  original  producer  by  a  law 
of  this  kind.  Natural  laws  are  invariable.  There  are 
no  exceptions  to  their  operations.  But  there  is  no  evi- 
dence that  it  has  ever  been  recognized  that  any  title  to 
the  product  was  created  by  labor.  That  can  hardly  be 
a  natural  law  to  which  all  human  action  furnishes  a 
continual  exception.  As  there  is  no  title  by  labor 


52  The  Labor  -  Value  Fallacy. 

known  in  fact,  it  is  obvious  that  if  nature  means  the 
system  of  things  as  they  are,  nature  has  ordained  no 
such  title. 

There  is  another  sense  in  which  the  word  nature  is 
often  used.  In  this  sense  it  is  contrasted  with  art,  and 
is  applied  to  that  condition  of  things,  which  the  art  of 
man  has  not  modified  or  changed.  In  this  sense  na- 
ture can  hardly  grant  any  title  to  the  laborer,  for  as 
soon  as  man  has  exerted  his  efforts  upon  a  natural  ob- 
ject, it  ceases  to  be  in  the  domain  of  nature. 

Mr.  J.  S.  Mill  regretted  that  Plato  had  not  left  to 
posterity  a  Socratic  dialogue  "  On  Nature,"  so  that  the 
precise  definitions  of  this  term  might  have  been  handed 
down  through  the  centuries  and  much  confusion  of 
thought,  probably,  thereby  prevented.  To  meet  this 
long  felt  want,  Mr.  Mill  gave  us  his  chapter  on  "  Na- 
ture," as  an  introduction  to  his  "  Essays  on  Religion." 
The  careful  perusal  of  this  chapter  would,  I  think,  effec- 
tually deter  his  followers  from  claiming  that  the  laborer 
has  acquired  any  title  from  nature  to  the  product  of 
his  labor.  Mr.  Mill  recognizes  as  the  only  proper  uses 
of  the  word  those  which  I  have  given  above.  First, 
nature  as  including  man  and  all  things  as  they  are,  and 
second,  nature  as  including  all  those  things  which  the 
art  of  man  has  not  modified  or  changed.  In  the  first 
sense,  it  is  absurd  to  say  that  anything  is  according  to 
nature  which  is  not  an  invariable  fact.  It  is  then  only 
in  the  second  sense  that  it  can  be  claimed  that  nature 
gives  to  the  laborer  a  title  to  the  product  of  his  labor. 

But  it  is  contrary  to  experience  and  observation,  that 


Title  to  Property  among  Savages.  53 

such  title  is  conferred  by  nature.  To  determine  what 
nature  does  we  must  observe  man  uninfluenced  by  art. 
But  the  only  men  in  a  state  of  nature,  of  whom  we  have 
any  knowledge  are  savages.  If  nature  gives  to  the 
laborer  the  product  of  his  labor,  we  should  find  a  nat- 
ural instinct  to  this  effect  in  the  breast  of  the  most  un- 
tutored savage.  I  am  ready  to  admit,  that  my  oppor- 
tunities for  observing  untutored  savages  have  been 
few,  but  I  think  that  the  eminent  political  economists 
and  socialists. have  not  been  more  favored  in  this  res- 
pect. I  have  not  found  in  the  writings  of  any  of  them 
any  attempt  to  cite  examples  of  this  instinct  in  savages. 
On  the  contrary,  I  have  read  many  descriptions  of  the 
habits  of  savages,  by  well  known  travelers,  and  I  have 
never  yet  found  any  suggestion  that  any  savage,  even 
the  very  lowest,  had  a  sense  of  acquiring  right  to  prop- 
erty by  the  labor  of  production.  Among  savages  the 
ownership  of  property  seems  to  be  determined  solely 
by  the  ability  to  retain  control  of  it.  The  natural  in- 
stinct of  man  is  to  possess  himself  if  he  can  of  those 
things  which  will  satisfy  his  wants.  Of  this  there  is 
abundant  proof.  The  untutored  savage  takes  what- 
ever he  sees,  that  he  wants,  if  some  stronger  power  than 
his  does  not  prevent  him,  and  never  thinks  whose  labor 
has  produced  it. 

Does  any  man  doubt  this  ?  Can  there  be  any  other 
conclusion  reached  by  calmly  considering  this  question? 
What  possible  justification  then  is  there  for  the  appeals 
to  nature  which  are  so  liberally  uttered  by  Mr.  George, 
and  his  followers  ?  Where  can  the  slightest  evidence 


54  The  Labor  -  Value  Fallacy. 

be  found  that  nature  has  vested  the  title  to  any  prop- 
erty in  the  laborer  who  produced  it  ? 

Perhaps  it  is  well,  in  order  to  account  for  the  many 
confident  appeals  to  nature  which  are  made  by  Mr. 
George,  as  well  as  by  abler  men  and  more  consistent 
reasoners,  to  refer  once  more  to  Mr.  Mill's  essay.  He 
there  describes  a  use  of  the  word  nature,  which  is  a 
survival  of  those  superstitious  times,  in  which  all  the 
attempts  of  men  to  interfere  with  the  action  of  natural 
forces  were  regarded  as  impiou.s.  There  are  probably 
some  ignorant  persons,  even  now,  who  look  upon  light- 
ening rods  and  preventives  of  diseases  as  irreverent 
challenges  of  the  wisdom  of  Providence.  By  a  confu- 
sion of  ideas,  with  such  persons,  nature  comes  to  mean 
the  designs  of  Providence,  and  also  such  an  ordering 
of  the  affairs  of  this  world,  as  they  think  ought  to  be. 
The  appeal  to  nature  thus  becomes  merely  an  assertion 
of  their  own  opinions  ;  those  actions  which  they  ap- 
prove being  according  to  nature,  and  those  which  they 
disapprove  unnatural.  This  is  a  common  use  of  the 
word,  and  will  be  found  frequently  in  the  speech  and 
writings  of  men  whose  ideas  are  vague,  but  who  wish 
to  express  themselves  emphatically.  The  appeal  to 
nature,  to  establish  the  title  of  the  laborer  to  the  pro- 
duct of  his  labor  thus  resolves  itself  into  a  mere  beg- 
ging of  the  question.  The  socialist  in  effect  says,  such 
a  title  ought  to  be  because  it  ought  to  be.  This  is  the 
whole  of  his  argument  from  nature. 

It  is  according  to  our  observation  of  nature,  that 
mothers  love  and  protect  their  offspring,  and  we  are 


Nature  does  not  protect  the  Laborer.  55 

correct  in  saying  that  she  is  an  unnatural  mother,  who 
neglects  or  destroys  her  child.  But  it  is  not  according 
to  our  observation  and  experience,  that  opportunities 
are  uniformly  provided  by  any  natural  agency  for  men 
to  satisfy  their  wants  by  labor.  Nature  produces  with 
entire  disregard  to  the  wants  of  man;  she  takes  no 
pains  to  satisfy  his  wants.  She  is  careless  whether  he 
is  starved  or  surfeited  or  poisoned  by  that  which  she 
produces.  The  opportunities  which  he  enjoys  to  sat- 
isfy his  wants  by  labor  must  be  and  always  have  been 
contrived  by  his  own  intelligence.  If  his  intelligence 
can  not  contrive  the  opportunity,  nature  lets  him  perish. 
It  is  not  according  to  experience  that  nature  loves  and 
protects  the  laborer.  She  is  deaf  to  his  desires  and 
blind  to  his  efforts.  She  destroys  the  product  of  indus- 
try and  the  most  industrious  laborer  also,  and  has  no 
remorse. 

In  one  sense  nature  is  the  rich  but  blind  enemy  of 
man.  All  that  he  possesses  he  seizes  from  her,  and  he 
is  always  in  danger  from  her  heedless  blows.  Through 
the  knowledge  of  nature,  acquired  with  infinite  inge- 
nuity and  handed  down  and  augmented  from  genera- 
tion to  generation,  men  have  constructed  an  elaborate 
structure  of  art.  It  is  art  which  enables  man  to  elude 
the  destructive  strokes  of  the  sightless  giant  nature, 
and  it  is  art  which  teaches  him  to  snatch  her  products 
and  adapt  them  to  his  ever  developing  wants.  Art  is 
the  work  of  man.  It  is  unnatural  for  it  is  in  one  sense 
opposed  to  nature.  It  is  artificial.  But  it  is  not  un- 
natural in  the  same  sense  as  is  a  mother's  cruelty  to  her 


56  The  Labor -Value  Fallacy. 

child.  The  right  of  property  is  unnatural  in  this  sense 
alone  because  it  is  artificial.  It  is  a  part  of  that  slowly 
developed  system  of  art,  by  which  man  has  grasped 
the  products  and  powers  of  nature  and  caused  them  to 
satisfy  his  wants. 

Nature  seems  totally  oblivious  that  man  has  any  title 
whatever  to  property.  She  takes  possessions  from  one 
and  destroys  them,  or  confers  them  upon  others,  with- 
out rule  or  reason.  In  a  state  of  nature  there  is  no 
property  right,  unless  the  control  which  the  wild  beast 
exercises  over  his  lair  and  his  prey  may  be  dignified  by 
that  name.  The  whole  idea  of  title  to  property,  it 
seems  to  me,  is  the  creation  of  art.  We  can  not  peer 
back  into  the  primaeval  gloom  to  detect  its  earliest 
suggestion.  But  look  where  we  may,  we  find  no  rec- 
ognition of  it  in  nature. 

It  is  probable,  therefore,  that  man  invented  property 
right  as  he  invented  the  so-called  division  of  labor,  to 
enable  him  the  better  to  contend  with  nature.  And  when 
he  found  that  the  idea  of  right  of  property  encouraged 
production,  and  helped  to  satisfy  more  of  his  wants  he 
defined  it  more  clearly  and  gave  it  greater  respect.  And 
this,  I  think,  may  describe  the  whole  process.  It  has 
not  been  one  uninterrupted  series  of  improvements. 
Not  every  change  has  been  beneficial.  But  the  whole 
development  has  been  greatly  for  the  advantage  of  so- 
ciety, and  he  is  little  better  than  a  madman,  who  would 
destroy  the  growth  of  centuries  because  he  is  not  satis- 
fied. 

Through  the  whole  development  of  the  right  of  prop- 


Christianity  and  Socialism.  57 

erty,  it  does  not  appear,  as  I  have  already  endeavored 
to  show,  that  the  title  of  the  laborer  to  the  product  of 
his  labor  has  been  thought  worthy  of  practical  consid- 
eration. It  is  entirely  opposed  to  the  whole  spirit  of 
this  development,  and  it  can  not  be  adopted  now  with- 
out subverting  and  destroying  the  artificial  fabric  of 
civilization. 

Deprived  of  the  appeal  to  history,  to  custom  or  to 
nature,  it  maybe  that  the  socialists  will  turn  to  religion 
for  a  justification  of  the  laborer's  title  to  the  product  of 
his  labor.  I  do  not  think  that  socialists  have  at  any 
time  been  remarkable  for  religious  professions  or  prac- 
tices. On  the  contrary,  I  think  that  socialism  is  com- 
monly associated  with  the  most  sacrilegous  opinions. 
But  there  are  some,  who  like  Henry  George,  are  not 
too  conscientious  to  quote  a  mangled  verse  of  scripture, 
now  and  then,  if  it  seems  to  them  that  they  can  thereby 
make  a  point.  And  there  are  multitudes  of  well  mean- 
ing people,  who  have  a  decent  respect  for  the  words  of 
the  Bible,  who  are  influenced  thereby.  There  are, 
moreover,  a  great  many  teachers  and  preachers  of 
Christianity,  who  reason  loosely,  and  whose  sympathies, 
being  with  the  poor,  are  ready  to  take  the  view  of 
society  which  seems  popular,  and  encourage  the  belief 
that  somehow  the  laborers  have  been  unjustly  deprived 
by  the  rich  of  the  products  of  their  labors.  I  do  not 
say,  that  the  doctrine,  that  the  title  to  the  product  of 
labor  ought  to  vest  in  the  laborer,  is  definitely  taught 
from  Christian  pulpits.  I  do  not  think,  that  Christian 


58  The  Labor -Value  Fallacy. 

ministers  often  reason  sufficiently  closely  on  such  mat- 
ters, to  arrive  at  such  precise  conclusions.  But  I  have 
heard  many  expressions  from  such  sources  which  tend 
in  that  direction,  and  which  show  that  current 
discussion  is  shaping  the  minds  of  religious  people  to 
accept  this  belief. 

It  seems  to  me,  however,  that  this  doctrine  is  as 
opposed  to  the  spirit  of  Christianity,  as  it  is  to  existing 
law  and  order.  The  teaching  of  the  Old  Testament  is 
that  all  property  is  the  gift  of  God,  and  the  man  who 
serves  God  is  encouraged  to  expect  prosperity.  Loss 
of  property  is  represented  to  be  a  trial  of  man's  faith, 
as  in  the  case  of  Job,  and  steadfast  faith  in  God  is  re- 
warded by  a  restoration  of  his  property  greatly 
increased.  When  the  children  of  Israel  sinned  against 
Jehovah,  they  were  punished  by  loss  of  property  and 
other  calamities.  When  they  obeyed  the  commands  of 
Jehovah,  the  property  of  their  enemies  was  given  to 
them.  Nowhere  in  the  Bible  is  there  any  suggestion, 
that  man  acquires  by  labor  a  just  title  to  the  product 
of  his  labor,  such  a  suggestion  would  be  not  only 
foreign  to,  but  destructive  of  the  teaching  of  the  Bible. 
"The  Lord  gave,  and  the  Lord  hath  taken  away; 
blessed  be  the  name  of  the  Lord."  This  seems  to  be 
the  epitome  of  the  doctrine  of  the  Bible  concerning 
property. 

The  New  Testament  and  Christianity  built  upon 
this  foundation  but  did  not  change  it.  The  spirit  of 
Christ's  life  and  teaching  was  self-renunciation  not 
self-assertion.  There  is  something  better  worth  work- 


Christian  Doctrine.  59 

ing  for  than  the  accumulation  of  property.  He  said, 
"  Labor  not  for  the  meat  which  perisheth,  but  for 
that  meat  which  endureth  unto  everlasting  life,  which 
the  son  of  man  shall  give  unto  you."  He  taught,  that 
under  certain  circumstances  it  was  the  duty  of  a  rich 
man  to  sell  all  that  he  had  and  distribute  to  the  poor; 
but  this  sacrifice  was  to  be  made  for  the  rich  man's  own 
benefit.  He  was.  thereby  to  acquire  "treasure  in 
Heaven."  The  poor  were  not  taught  by  him  to 
demand  gifts  from  the  rich.  Such  demands  would  be 
hostile  to  his  teachings. 

In  the  time  of  Jesus  Christ  the  political  and  econom- 
ic affairs  of  men  were  in  a  deplorable  condition. 
They  were  in  much  worse  condition  than  similar  affairs 
at  the  present  time.  I  suppose  the  most  hardened 
socialist  will  not  deny  this.  There  was  little  protection 
for  life  or  property,  and  fraud  and  dishonor  and  name- 
less crimes  were  too  common  to  be  noticed.  This  was 
especially  true  of  Herod's  Kingdom,  and  of  the 
provinces  into  which  it  was  divided.  There  was  hardly 
any  social  order.  Government  was  only  the  forcible 
execution  of  military  commands,  and  bloody  factious 
fights  rendered  it  continually  uncertain  who  were  the 
government.  A  very  considerable  portion  of  the  men 
of  Palestine  were  openly  robbers,  and  the  multitude  of 
publicans  or  tax-farmers  were  little  better.  There  was 
no  such  thing  as  justice.  The  rights  of  men,  if  any  one 
had  thought  of  them,  would  have  seemed  utterly 
absurd.  The  Romans  were  the  masters  of  the  world, 
and  the  favorites  of  the  Roman  Emperor  went  every- 


60  The  Labor -Value  Fallacy. 

where,  seizing  whatever  pleased  them,  punishing  all 
resistance  to  their  pleasures  with  scourging  and  torture 
and  cruel  deaths,  and  spending  their  plunder  in  brutal, 
vicious  and  lavish  luxury. 

Surely  then,  if  ever,  a  divine  revelation  of  the  right 
of  the  laborer  to  the  product  of  his  labor  would  have 
been  appropriate.  Surely  then,  if  ever,  divine  encour- 
agement to  rise  and  assert  its  rights,  was  needed  by 
down-trodden  and  demoralized  humanity.  But  such 
was  not  the  burden  of  the  divine  message.  The  Christ 
had  nothing  to  say  of  the  rights  of  man  ;  he  passed  in 
silence  the  laborers  who  had  no  title  to  the  products  of 
their  labors,  he  even  advised  peaceful  submission  to 
the  foreign  military  tyrants  who  ruled  his  countrymen. 
He  suffered  himself  without  complaint  the  undeserved 
punishment  of  scourging,  and  bore  without  revolt  or 
remonstrance,  having  broken  no  law  and  done  no 
wrong,  the  most  manifest  injustice, — the  ignominious 
death  by  crucifixion. 

The  divine  message  in  that  den  of  thieves,  which 
the  world  then  was,  was  not  resistance  to  oppression, 
but,  "  Love  your  enemies,  do  good  to  them  which  hate 
you,"  etc.  If  we  can  imagine  a  country  peopled  solely 
by  such  men  and  women  as  now  fill  our  prisons  and 
occupy  the  attention  of  our  police,  we  would  probably 
not  conceive  a  state  of  affairs  so  bad,  as  existed  in  Pal- 
estine about  the  year  30  A.  D.  To  such  a  community 
the  divine  word  was  preached,  "  Unto  him  that  smiteth 
thee  on  the  one  cheek,  offer  also  the  other."  It  was, 
indeed,  light  shining  in  darkness. 


Equality  and  Christianity.  61 

This  I  think  is  the  spirit  of  Christ's  teaching,  and 
of  true  Christianity,  at  least  so  far  as  the  question  of 
the  laborer's  title  to  the  product  of  his  labor  is  con- 
cerned. <^If  he  were  entitled  to  this  product,  the  spirit 
of  Christianity  would  prevent  the  assertion  of  such 
title.  N 

I  have  been  at  a  loss  to  discover  how  such  ideas  as 
the  following  are  obtained  from  the  teachings  of 
Christ. 

Dr.  Geike,  in  his  "  Life  of  Christ,"  says  the  seminal 
principle  of  Christianity  is  "the  realization  of  the  truth 
that  the  whole  human  race  are  essentially  equal  in  their 
faculties,  nature  and  inalienable  rights." 

This  is,  I  think,  a  fair  example  of  similar  express- 
ions which  occur  often  in  the  writings  of  eminent  ex- 
pounders of  religion.  I  give  it  here,  because  it  is  the 
latest  of  such  expressions  which  I  have  noted.  It  seems 
to  me  not  only  an  error  but  an  error  which  can  only  be 
explained  by  a  confusion  of  ideas.  Christ  taught  that 
each  individual  is  the  object  of  his  Heavenly  Father's 
love,  and  when  any  individual  labors  and  is  "  heavy 
laden,"  he  may  find  rest  in  his  love.  He  taught  that 
all  men  are  children  of  the  Heavenly  Father.  But  I 
do  not  recall  any  expression  which  can  be  construed  to 
mean  that  they  are  equal  in  any  other  respect.  Saying 
that  all  men  are  children  of  God  does  not  imply  other 
equality  among  them. 

Indeed  I  think  the  introduction  of  this  claim  of 
equality,  as  a  fundamental  doctrine  of  Christianity,  is 


62  The  Labor -Value  Fallacy. 

a  grave  mistake  and  not  authorized  by  the  words  of  the 
Bible.  I  think  it  also  a  dangerous  heresy,  subversive 
of  the  real  spirit  of  Christianity.  Men  are  not  equal 
in  fact  in  their  faculties.  Men  are  all  embraced  in 
human  nature.  They  are  all  parts  of  nature  in  gen- 
eral. It  is  a  confusion  of  ideas  to  say  they  are  equal 
in  nature.  It  is  a  form  of  words  which  has  no  precise 
meaning.  Whether  men  are  equal  in  their  inalienable 
rights  depends  upon  the  organization  of  the  society  in 
which  they  live.  Men  have  no  rights  outside  of  soci- 
ety. To  say  then,  as  Dr.  Geike  does,  that  "  the  whole 
human  race  are  essentially  equal  in  their  faculties, 
nature  and  inalienable  rights,"  is  the  seminal  principle 
of  Christianity,  is  to  say  that  Christianity  is  founded 
upon  a  proposition  which  is  either  untrue,  vague  or 
variable,  as  you  regard  it  in  each  of  its  threefold  divis- 
ions. It  is  moreover  a  proposition  calculated  to  pro- 
duce discontent  in  the  minds  of  men,  against  society. 
This  Christ  never  did.  His  teaching  was  directed  to 
making  the  individual  discontented  with  himself  on 
account  of  his  own  sinfulness.  This  kind  of  discon- 
tent may  be  beneficial,  for  it  may  produce  regeneration. 

The  new  view  of  religion  which  mankind  gained  from 
Christ  was  the  special  importance  of  the  attitude  of 
the  individual  toward  God.  Before  his  time  the  fam- 
ily, the  tribe  or  the  nation  was  supposed  responsible 
for  the  religious  behavior  of  its  members.  Christ 
taught  that  God  looks  into  the  heart  of  man  to  judge 
him.  From  this  new  view  sprang  the  increased  import- 


Christianity  and  Emancipation.  63 

ance  of  the  individual  in  other  relations  of  life,  and, 
although  its  influence  may  not  be  directly  traced  in  the 
development  of  individual  right  of  property,  it  may 
nevertheless  have  been  felt  there.  And  this  new  view  of 
each  man's  personal  responsibility  to  God  for  his  doings 
may  have  aided  in  working  out  the  economic  conclu- 
sion, that  man  is  a  more  productive  member  of  soci- 
ity,  if  he  is  politically  a  freeman.  The  connection  of 
the  teachings  of  Christ  with  this  modern  belief  is  not 
close.  It  requires  some  pious  blindness  to  overlook 
the  Christian  slave-makers  and  slave-holders  of  eighteen 
centuries,  and  to  attribute  to  the  spirit  of  Christianity 
the  emancipations  of  the  nineteenth  century.  Yet  there 
is  a  connection.  It  may  be  that  the  advances  of  the 
individual  in  many  directions  are  kindred  developments 
of  upward  reaching  man,  and  that  all  are  but  parts  of 
and  stages  in  the  whole  harmonious  growth. 

Competition  is  the  result  of  emancipation.  This 
Christianity  encourages,  as  it  teaches  the  responsibility 
of  the  individual  ;  and  it  harmonizes  with  the  modern 
ideas,  that  individual  freedom  of  action  and  individual 
freedom  in  acquiring  and  controlling  property,  produce 
the  noblest  forms  of  personal  and  social  life.  The 
full  recognition  of  individual  responsibility  involves 
the  keenest  competition. 

But  Christianity  adds  to  its  commandment,  "  Thou 
shalt  love  the  Lord  with  all  thy  heart,"  by  which  is 
inculcated  man's  individual  responsibility  to  God,  this 
second  commandment  which  is  like  unto  it  in  import- 
ance, "  Thou  shalt  love  thy  neighbor  as  thyself." 


64  The  Labor-  Value  Fallacy. 

That  is,  if  I  may  give  these  teachings  a  modern  form, 
competition  should  be  tempered  with  charity.  "  On 
these  two  commandments"  Christ  said,  "hang  all  the 
law  and  the  prophets."  On  the  proper  observance  of 
these  two  principles  at  the  present  day  seems  to  depend 
the  maintenance  and  improvement  of  modern  civiliza- 
tion. 

It  may  be  seen  that  I  have  gone  too  far  in  tracing  a 
connection  between  the  Christian  doctrine  of  the  respons- 
ibility of  the  individual  to  God,  and  individual  com- 
petition. As  I  have  already  said,  the  connection  is  not 
close.  It  is  not  at  all  necessary  to  my  argument  that 
it  should  be  admitted  at  all.  I  have  only  introduced 
it  here  as  a  suggestion  of  the  harmony  which  may  be 
established  between  the  Christian  religion  and  the  work 
ing  of  economic  laws,  and  to  hint  how  the  best  results  of 
competition  are  obtained,  when  it  is  modified  by  charity. 

I  think  this  consideration  may  also  suggest  the  fun- 
damental antagonisms  between  Christianity  and  social- 
ism. As  far  as  I  have  been  able  to  observe  all  social- 
ists are  anti-christian.  I  think  this  irreconcilable  dif- 
ference lies  in  the  Christian  teaching  of  the  responsi- 
bility of  the  individual  to  God,  and  in  the  fact  that 
Christian  charity  is  essentially  voluntary  and  not  com- 
pulsory. 


The  Desire  to  Relieve 


My  argument  would  probably  seem  unsatisfactory  to 
most  readers,  if  I  should  leave  it  at  this  point.  I  think 
I  have  shown  conclusively,  that  value  is  not  created  by 
labor,  and  that  although  labor  may  have  been  expended 
in  producing  many  of  the  articles  to  which  we  attach 
value,  there  is  no  traceable  relation  between  the  labor 
and  the  value,  which  can  justify  us  in  saying  that  the 
labor  creates  or  determines  the  value.  In  proving  this 
I  have  also  shown  that  there  is  no  warrant  for  the  claim 
that  all  wealth  is  produced  by  labor.  And  I  think  I 
have  also  made  it  clear,  that  the  assumption  that  the 
just  title  to  the  product  of  labor  vests  in  the  laborer, 
rests  on  no  basis  which  is  worthy  of  respect.  If  I 
have  done  this  so  successfully,  that  any  one  reading 
what  I  have  written,  with  ordinary  attention,  is  con- 
vinced, I  have  destroyed  the  foundations  of  socialism. 
This  is  what  I  hoped  to  do,  but  I  am  conscious  that 
socialist  notions  and  half-beliefs  are  so  common,  even 
among  men  who  fear  and  abhor  socialist  practices,  that 
the  destruction  of  the  ground  work  of  socialism  must 
leave  vacancies  in  many  minds,  and  I  wish,  if  possible, 
to  provide  some  sound  doctrine  to  take  the  place  of 
those  erroneous  beliefs,  which  I  have  tried  to  destroy. 

There  is  a  great  deal  of  misery  in  civilized  commu- 
nities, and  human  nature  is  so  constituted  that  the 
knowledge  of  suffering  causes  pain,  and  begets  an 
impatient  desire  to  relieve  misery  and  remove  its  cause. 
The  first  impulse  which  every  one  feels  at  the  sight  of 


66  The  Labor -Value  Fallacy. 

suffering  is  that  it  has  been  caused  by  some  human 
agency,  and  that  some  wrong  has  been  committed.  If 
a  ship  founders  at  sea,  we  hasten  to  accuse  the  owners 
or  officers  of  criminal  negligence.  If  a  passenger 
train  leaves  the  rails  and  a  hundred  lives  are  lost  in  its 
debris,  we  blindly  rage  against  all  the  servants  of  the 
railroad  company,  from  the  brakemen  to  the  orna- 
mental directors. 

The  desire  to  punish  some  wrong-doer  follows  almost 
immediately  in  most  minds  the  perception  of  misery. 
Human  nature  seems  to  demand  a  victim  in  whose. per- 
son suffering  shall  be  expiated.  And  this  demand  is 
often  unreasoning  and  even  passionate.  Among  sav- 
ages it  provides  bloody  human  sacrifices  to  gods. 
It  once  led  men  to  burn  innocent  and  harmless  old 
women,  as  witches.  Among  more  civilized  men  it  devel- 
opes  itself  in  various  phases,  from  the  shooting  of  land- 
lords in  Ireland,  to  the  execration  of  railroad  kings  in 
America. 

It  is  this  human  disposition  to  find  a  wrong  at  the 
bottom  of  all  suffering,  which  opens  the  minds  of  men 
to  admit  the  labor- value  fallacy.  The  lowest  classes  in 
all  civilized  communities  suffer  more  or  less.  There  are 
very  many  men,  women  and  children,  in  the  large  cities 
of  Europe  and  America,  who  frequently  cannot  obtain 
food,  clothing  and  shelter,  when  they  need  them. 
These  bear  emaciated,  frost-bitten  bodies,  the  easy  prey 
to  diseases,  and  some  of  them  sometimes  die  in  cir- 
cumstances of  heart-rending  wretchedness.  The  well- 
fed,  comfortably  housed  man  turns  away  from  such 


The  Argument  from  Misery.  67 

sights,  and  would  gladly  be  without  the  knowledge 
that  such  things  exist,  but  somehow  he  cannot  escape 
the  feeling  that  such  things  ought  to  be  prevented. 
And  when  the  socialist  agitator  draws  the  startling  con- 
trast, between  the  condition  of  the  starving,  fever 
pinched  wretch,  and  the  luxurious  millionaire,  living 
perhaps  within  a  stone's  throw  of  each  other,  we  are 
apt  to  imagine  that  somehow  the  latter  is  accountable 
for  the  misery  of  his  human  brother.  Let  the  social- 
ist tell  of  the  hardships  of  the  brakeman  who  in  dark- 
ness and  storm  performs  his  perilous  duty  on  the  top 
of  the  rumbling  freight  train,  and  then  let  him  picture 
the  brave  man  crushed  in  a  great  collision,  and  with  his 
last  breath  expressing  the  fear  that  his  wife  and  child 
will  come  to  want.  Let  this  story  be  continued,  and 
show  how  the  child  dies  from  starvation,  and  the  wife 
drowns  herself  to  escape  a  worse  fate,  and  then  let 
the  socialist  describe  the  comfortable  home  and  luxu- 
rious life  of  the  president  of  the  rail-road,  whose  prop- 
erty has  been  benefited  by  the  brakeman's  labor.  Let 
him  then  in  eloquent  and  impassioned  words  assert  that 
a  great  injustice  has  been  done,  that  the  brakeman  and 
his  family  have  been  wronged,  and  that  the  rail-road 
president  has  profited  by  the  wrong,  and  that  it  is  a 
vicious  organization  of  society  which  permits  the  pres- 
ident to  enjoy  his  wealth,  while  the  brakeman  and  his 
family  perish.  Then  the  socialist  may  conclude  tri- 
umphantly, and  nine  out  of  ten  men  will  be  led  by 
their  aroused  sympathies  to  agree  with  him,  that  as  all 


68  The  Labor -Value  Fallacy. 

wealth  is  created  by  labor,  justice  can  never  be  secured 
until  all  property  is  vested  in  the  laborers. 

It  requires  calm  consideration  to  perceive  that  the 
unfortunates  who  exist  everywhere,  have  no  just  com- 
plaint against  society,  and  very  likely  have  not  suffered 
wrong  from  any  one.  But  calm  consideration  cannot 
fail  to  bring  unprejudiced  minds  to  this  conclusion. 
The  fact  of  coming  into  the  world  gives  no  individual 
a  right  to  food,  clothes  and  shelter,  but  human  love 
and  sympathy  give  these  as  favors,  almost  always, 
while  the  individual  is  unable  by  reason  of  weakness 
or  lack  of  skill  to  secure  them  for  himself.  But  if  the 
individual  having  sufficient  strength  and  skill  makes  no 
effort  to  acquire  those  things  which  he  needs,  love  and 
sympathy  will  probably  cease  to  provide  them. 

However  much  benevolently  disposed  people  may 
wish  that  all  men  may  be  comfortably  provided  with 
food  and  clothes  and  shelter,  it  is  impossible  that  this 
can  ever  be.  These  must  always  remain  the  rewards 
of  well  directed  exertion,  and  there  must  always  be 
some  who  fail  to  make  the  exertions,  or  whose  exer- 
tions are  not  well  directed.  There  must  always  be,  as 
there  always  have  been,  some  to  whom  daily  bread  does 
not  come  day  by  day,  and  some  of  these  unfed  mortals 
must  be  overlooked  by  the  most  vigilant  benevolence. 
But  for  the  failures  of  the  unfortunates,  or  for  the  over- 
sights of  benevolence,  neither  society  nor  its  prosperous 
members  are  to  be  blamed. 

Society  is  a  highly  organized  and  complicated  sys- 
tem, differing  in  its  form  and  development  in  different 


The  Organization  of  Society.  69 

places  and  for  different  peoples.  The  principles  on 
which  various  forms  of  society  are  based,  may  at  one 
time  have  been  mere  arbitrary  rules.  If  so  they  have 
become  crystalized  into  immemorial  customs,  and  have 
been  approved  by  the  ages  of  progress  toward  the  gen- 
eral advantage  of  the  members  of  society.  There  have 
been  steps  in  this  progress.  There  have  been  at  some- 
times slow  changes,  at  others  rapid  advances,  at  others 
retrograde  movements,  at  others  stagnant  hesitation. 
But  if  the  best  state  of  man  is  that  in  which  knowledge  is 
most  widely  diffused,  freedom  of  action  most  untram- 
meled,  and  the  most  divers  wants  are  most  completely 
satisfied,  the  society  of  the  present  day,  as  represented 
in  our  own  country,  and  in  some  of  the  states  of  Europe, 
has  reached  the  highest  development  ever  known. 

There  are  many  persons  of,  I  think,  envious  dispo- 
sitions, to  whom  inequality  in  the  condition  of  individ- 
uals seems  a  greater  hardship  than  general  deprivation. 
Such  persons  are  disposed  to  lament  the  changes  which 
have  been  made  in  the  last  hundred  years.  They  say 
that  industrial  and  commercial  activity  has  made  the 
rich,  richer,  and  the  poor,  poorer.  That  political 
enfranchisement  of  the  workingmen  has  not  checked 
this  growing  inequality.  That  one  hundred  years  ago 
employers  and  employed  worked  together,  and  were  on 
terms  of  friendly  intercourse.  But,  to-day,  the  employer 
knows  no  more  of  his  workmen  than  their  ability  to  com- 
plete their  tasks.  He  would  as  soon  make  companions 
of  his  machines  as  of  those  to  whom  he  pays  wages. 
This  may  be  true  in  a  degree.  It  is  undoubtedly  the 


70  The  Labor -Value  Fallacy. 

tendency  of  the  organization  of  industry  to  draw  mas- 
ter and  men  apart.  The  most  successful  manufacturer, 
or  merchant,  is  he  who  carries  on  his  business  on  a 
large  scale,  pushing  the  division  of  labor  to  the  limit 
of  economy.  The  manager  of  such  a  business  is  likely 
to  regard  his  laborers  as  parts  of  a  great  machine,  and 
to  have  little  feeling  of  companionship  with  them.  If 
this  is  an  evil,  it  is  one  which  is  made  necessary  by 
active  competition.  The  most  successful  manager  is 
likely  to  have  this  characteristic  most  highly  developed. 

But  is  this  anything  more  than  an  imaginary  evil  ? 
Can  no  amount  of  increase  in  the  comfort  of  his  life 
compensate  the  workman  for  losing  the  society  of  his 
boss  ?  If  the  master  has  gradually  drawn  away  from 
intercourse  with  his  men,  the  men  have  gradually 
gained  in  the  increased  purchasing  power  of  their 
wages.  Of  this  there  is  no  doubt.  Workmen  now 
wear  better  clothes,  eat  better  food,  and  enjoy  luxuries 
which  one  hundred  years  ago  were  not  within  the  reach 
of  the  most  opulent.  What  matter  if  the  social  scale 
has  been  lengthened  ?  Should  it  not  satisfy  the  critic 
of  progress,  if  all  have  been  raised  to  higher  planes  of 
consumption  ? 

But  there  is  another  consideration,  which  I  do  not 
remember  to  have  seen  noticed,  and  which  seems  to 
me  of  vast  importance.  About  seventy  years  ago, 
Malthus  predicted  great  evils  for  England,  when  the 
products  of  its  soil  would  no  longer  feed  its  popula- 
tion. But  the  population  of  England  has  increased 
far  past  that  point,  and  the  general  prosperity  of  the 


Influences  of  Competition.  71 

country  is  said  to  be  greater  than  ever.  The  support 
of  this  increased  population  has  been  furnished  by  the 
organization  of  industry  and  commerce,  effected  by 
competition.  This,  as  a  factor  in  the  food  problem, 
Malthus  did  not  take  account  of.  But  it  has  changed 
all  the  conditions  of  life  of  the  people  of  England. 
The  English  workman  of  to-day  has  very  different  sur- 
roundings from  those  of  his  predecessor  in  the  time  of 
Malthus.  He  may  not  now  have  so  much  country  to 
roam  in.  He  may  not  be  able  to  keep  a  cow  or  have 
a  patch  of  ground  in  which  to  grow  a  few  roots.  But 
he  is  equally  well-fed,  well  housed  and  well  clothed, 
and  moreover  there  are  twice  as  many  of  him.  This 
is  the  point  which  generally  escapes  remark.  The 
whole  case  is  not  by  any  means  presented,  when  the 
individual  of  to-day  is  compared  with  the  individual  of 
fifty  or  one  hundred  years  ago.  There  are  twice  as 
many  human  beings  living  comfortably  in  England  to- 
day as  were  there  when  Malthus  thought  that  popula- 
tion was  already  pressing  upon  the  limits  of  subsist- 
ence. Is  this  an  evil  or  a  good  ?  We  would  call  it  a 
great  calamity  if  war,  pestilence  or  famine  should 
destroy  every  other  inhabitant  of  a  country.  Ought 
not  then  that  to  be  reckoned  a  great  blessing  which 
doubles  population,  and  sustains  the  increase  as  well 
as  the  smaller  population  was  previously  maintained  ? 
Competition  has  done  this.  The  stimulus  to  individual 
exertion  afforded  by  laws  which  protect  each  man  in 
the  enjoyment  of  property  acquired  in  conformity  to 
law,  by  laws  which  enforce  contracts  and  give  to  men- 


72  The  Labor -Value  Fallacy. 

tal  exertion  a  greater  advantage  than  it  ever  before 
enjoyed  over  physical  labor,  has  enabled  millions  to 
keep  soul  and  body  together,  and  to  feel  more  or  less 
of  the  joy  of  existence,  who  never  would  have  visited 
these  glimpses  of  the  moon  at  all  if  the  "  good  old 
times  "  had  continued. 

Do  those  reformers  who  look  regretfully  into  the 
past,  and  assert  that  the  life  of  the  English  laborer,  as 
pictured  by  De  Foe,  was  preferable  to  the  life  of  the 
English  workman  of  the  present,  ever  reckon  the  mul- 
tiplication of  human  life  a  blessing  ?  Speaking  in  the 
interest  of  the  poorer  classes,  as  they  professedly  do, 
do  they  realize  what  a  return  to  the  habits  and  mode 
of  living  of  the  time  of  De  Foe  would  involve  ?  It 
would  involve  the  crushing  out  of  the  lives  of  millions. 
Every  turn  of  the  wheel  backward  toward  those  condi- 
tions under  which  the  workman  and  their  employers 
lived  and  worked  together  would  exterminate  millions. 
The  most  wretched,  the  lowest  in  the  scale  of  self- 
support,  those  whom  the  socialists  profess  to  be  most 
anxious  to  benefit,  would  go  first.  But  before  the 
imagined  comfort  of  the  laborer  of  De  Foe  could  be 
restored, — the  common  cow  pasture  and  the  vegetable 
patch, — vast  masses  of  population  to  whom  the  com- 
petitive system  furnishes  easily,  food  and  raiment, 
would  find  the  means  of  existence  cut  off  and  would 
perish  miserably. 

"The  bitter  cry  of  outcast  London,"  of  which  we 
have  heard  something  lately,  is  not  less  bitter  because 
it  is  not  peculiar  to  our  time.  The  wailing  of  the  suf- 


Improved  Condition  of  Laborers.  73 

fering  has  gone  up  from  the  comfortless  dens  of  all 
large  cities  since  men  devised  metropolitan  life.  It  is 
the  desire  of  every  man  of  human  impulses  to  miti- 
gate, or  if  possible  relieve  wholly  this  misery.  But 
every  right  minded  man  can  see  this  can  never  be 
wholly  accomplished.  If  any  one  compares  the  condi- 
tion of  the  abject  poor  of  London,  as  described  in 
recent  newspaper  articles,  with  the  condition  of  English 
laborers  during  and  previous  to  the  last  century,  as 
described  by  Fielding,  Defoe,  Macauley  and  others,  he 
cannot  avoid  the  conclusion  that  the  very  outcasts  are 
now  better  provided  for  than  were  once  the  common 
workingmen.  There  is  a  certain  advance  from  the 
chimney-less,  window-less  hut,  whose  floor  was  the  bare 
ground  covered  with  rushes  and  accumulated  filth,  to 
even  the  worst  single-room  tenement  of  the  present 
London  slums.  And  even  the  repulsive  bed  and  bed- 
stead in  the  vilest  furnished  lodgings  of  this  day  are 
better  than  the  dirty  straw  and  the  wooden  pillow, 
which  were  once  the  best  couch  that  English  laborers 
hoped  for.  This  comparison  should  not  cause  us  to 
pity  less  the  wretched  outcasts  of  to-day,  but  it  should 
prevent  us  from  rising  in  rage  and  cursing  the  organi- 
zation of  society.  Whatever  has  been  done  to  raise  the  v 
'  conditions  of  human  life  has  been  done  by  society. 
That  wretchedness  and  poverty  remain,  perhaps  as 
keenly  felt  as  ever,  is  due  to  an  ineradicable  character- 
istic of  human  nature.  The  art  of  man,  working  in 
the  form  of  social  organization,  may  multiply  com- 
forts, may  make  it  possible  for  two  human  beings  to 


74  The  Labor  -  Value  Fallacy. 

obtain  subsistence  where  one  could  with  difficulty 
secure  it  before,  but  it  cannot  abolish  poverty  or  an- 
nihilate wretchedness.  Poverty  and  wretchedness  are 
relative  facts.  They  imply  contrasting  affluence  and 
contentment,  and  while  individuals  are  created  under 
differing  conditions  and  are  endowed  with  differing 
faculties,  this  contrast  must  exist.  What  would  have 
been  affluence  several  centuries  ago  is  accounted  pov- 
erty to-day. 

The  Malay  enjoys  a  bodily  comfort,  beside  which 
the  frozen  existence  of  the  Esquimaux  seems  poverty, 
but,  as  neither  knows  of  the  life  of  the  other,  the  one 
feels  no  self-satisfaction,  the  other  no  envy.  But  the 
life  of  a  large  city  brings  these  opposite  conditions  in 
juxtaposition.  Art  produces  for  the  rich  the  equable 
temperature,  the  delicate  fruits,  the  delight  of  flowers 
and  tropical  foliage,  which  the  Malay  enjoys,  side  by 
side  with  dark,  cold  and  cheerless  dens  in  which  the 
poor  greedily  appease  the  cravings  of  hunger  with 
food  as  nauseous  as  that  of  the  Esquimaux.  This  con- 
trast serves  to  exhibit  the  reality  of  affluence  and  pov- 
erty. It  developes  exultation  and  pride  on  the  one 
hand,  the  grinding  torments  of  envy  on  the  other. 

There  is  opportunity  for  a  very  long  and  comprehen- 
sive essay  on  the  causes  which  produce  inequalities  in 
the  material  circumstances  of  individual  lives.  The 
tendency  of  historical  research  at  the  present  time  is  to 
find  out  and  identify  these  causes  The  efforts  to  learn 
the  thoughts,  habits  and  conditions  of  people,  and  by 


The  Labor -Perceiving  Faculty.  75 

these  to  explain  developments  of  national  traits  and 
events  in  national  progress  are  the  manifestations  of 
this  tendency.  I  have  not  the  time  or  space  here,  nor 
indeed  have  I  the  learning  or  ability  to  go  into  this 
subject  at  length,  nor  does  my  present  subject  demand 
it.  But  it  seems  to  me  that  a  voluminous  collection  of 
historical  data  might  be  made  to  show  that  the  wealth 
accumulating  faculty  has  been  developed  in  individuals 
and  nations  by  a  sort  of  natural  selection.  The  differ- 
entiation of  civilization  has,  as  the  naturalists  would 
say,  specialized  the  perception  of  value.  Man  as  far 
as  we  know  in  his  savage  state  had  little  or  no  percep- 
tion of  value.  When  men  began  to  trade  they  began 
to  recognize  value  in  exchange.  An  infant  has  no  per- 
ception of  this  value.  Savages  and  infants  desire  and 
attempt  to  possess  themselves  of  whatever  will  satisfy 
their  wants,  but  the  complicated  perception  of  what 
will  satisfy  the  wants  of  others,  and  thus  enable  them 
by  exchange  more  completely  to  satisfy  their  own  far 
off  wants,  is  beyond  their  powers.  In  this  respect 
some  human  beings,  even  in  civilized  communities,  re- 
main savages  and  infants  all  their  lives.  I  think  any 
of  us  can  readily  find,  in  our  own  neighborhoods,  men 
and  women  in  whom  the  perception  of  value  is  merely 
rudimentary.  Such  persons  may  be  highly  qualified 
in  other  ways,  may  in  fact  possess  many  amiable  and 
admirable  faculties,  but  lacking  this  they  are  compara- 
tively poorly  equipped  in  the  struggle  for  life  under 
present  conditions.  In  this  commercial,  competitive 
age  it  is  necessary  that  the  value-perceiving  individuals 


76  The  Labor -Value  Fallacy. 

should  hold  the  chief  social  power,  just  as  in  ruder 
times  those  who  possessed  the  fighting  faculty  dom- 
inated their  fellowmen.  The  value  -  perceiving  ge- 
niuses of  our  day  do  not  depend  for  their  authority 
upon  the  suffrages  or  the  favor,  but  upon  the  needs  of 
their  fellowmen,  just  as  the  best  soldiers  once  acquired 
command  by  mere  force  of  circumstances.  We  are  all 
familiar  with  the  process  by  which  excellence  in  the 
perception  of  value  asserts  itself.  There  are  well 
known  stories  in  every  family,  in  every  social  circle,  in 
every  village,  in  every  community  of  how  this  or  that 
individual,  perhaps  with  most  unpromising  beginning, 
gradually  developed  this  faculty,  surpassed  his  asso- 
ciates, organized  industry,  managed  trade,  attained 
wealth,  and  became  a  pillar  of  society  on  which  his 
friends  lean,  and  to  which  his  neighbors  look  with  res- 
pectful admiration.  And  equally  common  are  the  sto- 
ries of  failures  and  descents  from  prosperity  to  misery, 
by  reason  of  the  lack  of  this  faculty. 

I  do  not  wish  to  intimate  that  the  value-perceiving 
faculty  is  the  highest  or  most  to  be  desired.  I  merely 
wish  to  suggest  that  in  the  present  state  of  society, 
which  I  believe  is  the  highest  which  man  has  ever  at- 
tained, it  is  the  faculty  to  which  the  greatest  power 
attaches,  and  I  think  a  very  considerable  benefit  may 
accrue  from  the  simple  recognition  of  this  fact.  This 
removes  at  once  all  ground  for  the  common  feeling 
that  the  well  to  do  members  of  society  are  accountable 
for  the  misfortunes  and  failures  of  the  degenerating 
and  incompetent.  The  rich,  as  a  class,  have  no  more 


Independent  Poor  Men.  77 

just  responsibility  for  the  misery  of  the  poor  than  do 
the  whole  and  healthy  for  the  pains  and  infirmities  of 
cripples  and  imbeciles.  The  attitude  of  the  rich  to  the 
poor  should  be  one  of  pity,  but  there  should  be  no 
shade  of  remorse.  The  attitude  of  the  poor  to  the  rich 
should  be  one  inviting  compassion,  but  not  demanding 
compensation  for  wrongs  inflicted.  Of  course  I  mean 
by  this  only  the  abject  poor,  actually  suffering  for  the 
necessities  of  life.  I  am  prepared  to  maintain  that  a 
comparatively  poor  man  may  be,  and  should  be,  as 
happy  and  independent  as  any  rich  man,  asking  no  fa- 
vors and  confining  his  wants  strictly  within  his  re- 
sources. If  any  one  has  not  the  value-perceiving  fac- 
ulty he  can  not  acquire,  and  unless  fortunate  in  his 
friends,  can  not  retain  wealth,  but  he  can  lead  a  con- 
tented and  independent  life  by  limiting  his  wants  to 
his  means.  This  is  one  of  the  most  useful  results  of  the 
recognition  of  this  analysis  of  faculties.  A  great  many 
beneficial  members  of  society  have  not  the  value-per- 
ceiving faculty  well  developed.  Artists,  musicians, 
teachers,  clergymen,  skilled  laborers  and  those  who 
have  no  skill  can  not  be  expected  to  possess  this  fac- 
ulty in  any  considerable  excellence.  For  all  these,  a 
great  point  has  been  gained,  if  they  realize  the  exis- 
tence of  the  faculty  and  their  own  lack  of  it.  They 
will  then  no  more  expect  to  be  rich  than  to  be  phen- 
ominally  strong  or  extraordinarily  beautiful.  There  is 
a  very  common  notion,  that  the  acquisition  of  wealth 
is  a  matter  of  luck,  and  very  many  simple  minded 
people  are  seduced  by  this  notion  to  attempt  to  win 


78  The  Labor -Value  Fallacy. 

fortunes  in  various  forms  of  gambling.  But  one  may 
as  well  hope  to  add  a  cubit  to  his  stature  as  to  acquire 
permanent  wealth  in  this  way.  It  is  notorious  that  the 
sudden  acquisition  of  money  or  property  by  any  one, 
not  accustomed  to  its  use  and  care,  produces  demorali- 
zation, and  results  in  waste  and  ruin.  It  is  as  absolutely 
certain  that  the  individual  who  has  not  possessed  and 
cultivated  the  value-perceiving  facutty,  can  not  retain 
possession  of  a  fortune,  which  may  be  thrown  in  his 
lap  by  chance,  as  it  is  that  water  poured  out  on  a  hill 
top  will  seek  the  water  course  in  the  valley.  The  great 
gains  in  all  forms  of  gambling  go  ultimately  to  the 
value-knowing  manipulators  of  the  games,  and  those, 
who  are  lacking  in  the  value-perceiving  faculty,  and 
are  eager  to  try  their  luck,  furnish  the  wealth  which  the 
expert  gamblers  gather  in.  He  is  fortunate  who  cor- 
rectly estimates  his  own  value-perceiving  ability  and  is 
wise  enough  not  to  contend  with  those  who  are  better 
endowed  or  better  equipped  than  he. 

It  is  in  his  intellect  that  man  differs  from  the  beasts, 
and  it  is  in  intellect  that  one  man  differs  from  another, 
making  as  wide  a  difference  between  the  highest  and 
lowest  man  as  between  the  lowest  man  and  the  highest 
beast.  The  val  ue-perceiving  faculty  is  highly  developed 
in  the  highest  intellect.  He  who  has  this  faculty  will 
accumulate  wealth  by  comparatively  slight  exertion, 
while  he  who  has  it  not  will  not  gain  wealth,  no  matter 
how  energetically  he  labors.  Races  and  families  differ 
widely  in  respect  to  this  faculy,  but  it  is  generally  true, 
perhaps  by  natural  selection,  that  the  races  and  fami- 


The   Value -Sense  of  the  Jews.          .       79 

lies  highest  in  general  development  and  in  prosperity, 
exhibit  this  faculty  most  largely.  Other  things  being 
equal,  he  who  has  the  keenest  appreciation  of  art  will 
paint  best  and  will  enjoy  the  best  painting  ;  he  who  has 
the  most  delicate  musical  sense  will  secure  the  most  per- 
fect musical  instrument  and  will  perform  most  satisfac- 
torily thereon.  So  he  who  is  the  best  judge  of  value 
will  make  the  best  bargains,  and  will  most  rapidly  ac- 
cumulate wealth. 

Mr.  Matthew  Arnold  in  "  Literature  and  Dogma  " 
elaborated  a  theory,  that  the  Jews,  the  children  of  Is- 
rael, were  "  the  people  who  had  the  sense  of  righteous- 
ness most  glowing  and  strongest,"  just  as  the  Greeks 
had  the  sense  of  art,  and  the  Romans  the  military  spirit 
in  greatest  perfection.  A  similar  theory  might,  I  think, 
be  worked  out  and  illustrated  by  plentiful  historical 
examples,  to  the  effect  that  the  sense  of  value  has  char- 
acterized the  Jews  even  more  particularly  and  persist- 
ently than  the  sense  of  righteousness.  I  think  it  can  be 
shown  to  be  reasonable  that  this  sense  of  value,  pos- 
sessed by  the  Jews  in  an  unusual  degree,  has  kept  the 
race  for  centuries  separate  from  others  and  distinct 
among  other  peoples.  Without  the  military  sense  or 
spirit,  with  no  country  which  they  could  call  home, 
they  have  been  distinguished  from  other  men  by  their 
keen  perception  of  value,  and  by  this  trait  have  pre- 
served their  lineage  and  their  identity  through  centu- 
ries of  change  and  decay  in  other  races.  That  the  Jews 
have  fairly  inherited  this  faculty  no  one  can  doubt, 
who  reads  the  story  of  Jacob.  They  are  true  children 


80  The  Labor -Value  Fallacy. 

of  that  Israel,  who  drove  the  sharp  bargain  for  the 
birthright  with  the  value-dull  Esau,  and  placed  the 
ring-streaked  rods  by  the  water-troughs  of  Laban's 
heifers. 

The  best  development  of  the  value- appreciating 
faculty  has  passed  beyond  the  mere  bargain-driving 
stage,  and  the  greatest  commercial  successes  are 
achieved  by  the  organization  of  industry  and  the 
systemization  of  methods.  The  true  commercial  spirit 
of  modern  times  asks  only  a  fair  field  and  no  favors, 
seeks  only  trade  which  benefits  both  buyer  and  seller, 
increases  wealth  by  ingenious  devices,  by  more 
economic  transportation,  by  the  use  of  banks  and 
clearing-houses  and  boards  of  trade  or  exchange.  It 
has  contrived  that  the  earth,  or  that  portion  of  the 
earth  to  which  its  influence  extends,  sustains  a  hundred 
millions  more  human  beings  than  the  same  countries 
could  furnish  food  for  fifty  years  ago.  And  all  this, 
which  the  commercial  spirit  has  accomplished,  it  alone 
can  sustain.  If  the  intelligent  energy  of  this  spirit  is 
checked,  if  the  well  devised  system  of  its  operation  is 
disordered,  the  abundance  of  its  results,  on  which  so 
much  depends,  will  decrease.  Each  degree  of  this 
decrease  will  bring  straitened  circumstances  to  millions, 
hard  times,  difficulty  in  obtaining  food,  and  in  some 
cases  absolute  inability  to  sustain  life.  Surely  such  a 
prospect  should  warn  us  to  oppose  no  discouragement 
to  the  commercial  spirit.  Yet  this  is  exactly  what  social- 
ism demands  of  us.  In  their  blindness  and  folly  the 
socialists  would  take  the  management  of  property  from 


The  Improvement  of  Society.  81 

the  hands  in  which  the  present  organization  of  society 
has  placed  it,  would  have  a  redistribution  of  property, 
so  that  those  who  have  had  no  experience  in  its  man- 
agement, would  hereafter  manage  it.  They  would  re- 
construct the  laws,  so  that  those  who  possess  the  value- 
sense,  the  wealth  accumulating  faculty  would  no  longer 
be  able  to  enjoy  any  special  reward  for  the  exercise  of 
their  talent.  They  stupidly  imagine,  no  doubt,  that 
civilization  will  somehow  continue  to  exist  when  the 
motive  power  has  been  destroyed.  They  fancy  that 
somehow  the  hands  which  have  been  taught  to  labor, 
will  continue  laboring  when  the  brains,  which  taught 
and  directed  them,  are  dead  or  torpid.  But  any  such 
expectation  is  the  most  fatuous  imbecility. 

While  I  maintain  that  all  the  demands  of  the  social- 
ists are  unwarranted,  and  that  the  least  yielding  to  any 
of  them  will  cause  social  damage,  I  am  far  from 
claiming  that  the  social  organization  is  now  perfect.  It 
is  a  wonderful  development  as  it  now  exists,  but  I  doubt 
not,  that  it  is  capable  of  greater  development  and  im- 
provement. But  its  healthy  and  beneficial  growth  can 
only  be  in  accordance  with  the  principles  which  have 
brought  it  thus  far.  I  do  not  doubt  that,  by  wise 
measures  and  the  diffusion  of  correct  ideas  of  life,  the 
comfort  and  happiness  of  all  classes  of  men  may  be 
greatly  improved. 

The  improvement  in  the  condition  of  those  who 
labor  with  their  hands,  it  seems  to  me  is  not  to  be 
brought  about  by  the  demands  of  labor  societies,  when 


S3  The  Labor -Value  Fallacy. 

such  demands  are  based  on  the  theory  that  labor 
creates  value.  (I  believe  that  it  is  highly  proper,  and 
shows  the  possession  of  the  value-perceiving  faculty,  for 
laborers  to  unite  in  trade-unions,  for  the  purpose  of 
securing  the  highest  market  price  for  their  labor, — the 
commodity  which  they  have  to  sell.)  But  the  real  hope 
of  improving  the  laborer's  condition  is  in  the  diffusion 
of  the  gentle  spirit  among  all  classes.  This  might  be 
called  culture,  if  that  word  had  not  acquired  a  certain 
priggish  significance.  It  is  not  by  loudly  claiming 
what  he  supposes  are  his  natural  rights,  that  the  laborer 
is  to  be  benfitted,  but  by  lending  a  hand  in  sustaining 
and  advancing  cizilization  as  he  finds  it.  He  must  be 
the  friend  and  not  the  enemy  of  society,  if  he  would 
enjoy  life.  What  matter  if  he  finds  himself  somewhat 
low  on  the  social  scale  ?  If  he  rightly  estimates  his 
faculties  and  does  his  best  to  make  them  useful,  there 
is  a  fair  share  of  contentment  for  him.  If  instead  of 
ruminating  on  the  unaccountable  circumstances,  which 
have  given  to  certain  of  his  fellow  men  greater  advan- 
tages and  greater  powers  than  he  possesses,  he 
endeavors  to  cultivate  among  those  with  whom  he  comes 
in  contact,  mutual  respect  and  the  recognition  of  the 
worth  of  individual  character,  he  will  be  far  happier. 
The  substitution  of  efforts  to  deserve  well,  for  efforts 
to  secure  all  possible  rights  is  an  indication  of  the  gen- 
tle spirit. 

In  a  state  of  nature,  selfishness  is  uncontrolled.  It 
is  neither  desirable  nor  possible  to  eliminate  selfishness 
from  man.  It  is  an  essential  part  of  him.  But  the 


Selfishness.  83 


best  results  of  civilization  are  gained  by  stimulating 
individual  exertions  by  proper  rewards,  and  modifying 
selfishness  by  proper  self-restraints.  Without  selfish- 
ness man  would  have  no  force.  But  the  selfishness  of 
a  well-trained  man  is  to  natural  selfishness,  as  the  ap- 
petite of  a  polite  dinner-guest  is  to  the  hunger  of  a 
wild  beast.  The  one  satisfies  its  cravings  decently  and 
in  order,  and  with  due  regard  to  the  similar  cravings 
of  others,  but  the  beast  rends  and  devours  and  gorges 
himself,  oblivious  of  all  but  his  own  satisfaction.  The 
civilized  man,  whether  he  be  laborer  or  manager,  value- 
sharp  trader  or  value-dull  star-gazer,  should  not  be 
devoid  of  selfishness,  but  should  hold  it  like  his  pas- 
sions in  firm  control.  He  should  do  this  for  higher 
reasons  than  mere  selfish  wisdom  suggests,  yet  pure 
selfishness,  if  it  be  intelligent,  must  approve  this  self- 
restraint,  for  by  reason  of  it,  when  generally  exercised, 
each  individual  secures  most  prolonged  and  fullest 
enjoyment. 

The  pictures  which  socialist  agitators  draw  of  the 
lives  of  rich  men,  in  order  to  induce  laborers  to  cast 
aside  all  self-restraint  and  give  their  selfishness  full 
rein,  are  commonly  grossly  untrue.  But  even  if  they 
were  true,  the  argument  based  upon  them  is  a  gross 
fallacy.  Suppose  that  rich  men  pass  their  lives  in 
vicious  excesses,  what  possible  good  can  the  laborer 
derive  by  meditating  on  this  state  of  affairs,  or  by 
imitating  it  to  the  best  of  his  ability  ?  The  intent  of 
this  fallacy  is  to  lodge  in  the  minds  of  the  laborers  the 


84  The  Labor -Value  Fallacy. 

notion,  that  the  wealth  which  they  have  somehow 
created  is  being  spent,  in  riotous  living,  and  that  the 
laborers  ought  to  participate  in  this  sort  of  enjoyment, 
which  is  supposed  to  attend  this  use  of  riches.  The 
cunning  of  the  fallacy  lies  in  first  inflaming  the  passions, 
or  at  least  the  prejudices  of  laboring  men,  by  vicious 
descriptions,  and  then  teaching  them  that  these  waste- 
ful excesses  are  indulged  at  their  expense.  No  reason- 
ing could  be  more  unsound.  It  is  true  that  the  con- 
duct of  every  member  of  society  is  a  matter  of  interest 
to  every  other  member.  But  this  is  a  rule  which  applies 
to  rich  and  poor  alike.  The  rich  man  is  as  greatly 
injured  by  the  poor  man's  debauchery,  as  is  the  poor 
man  by  the  rich  man's  vice.  The  question  of  personal 
conduct  is  entirely  removed  from  the  question  of 
property. 

But  the  socialist  agitators  carry  their  attempts  to 
arouse  prejudice  in  the  minds  of  working  men  to  a 
still  more  vicious  extreme,  and  represent  in  certain 
cases  the  mere  possession  and  enjoyment  of  riches  as 
a  wrong.  The  name  of  Vanderbilt  is  so  commonly  used 
as  a  synonym  of  great  wealth,  and  the  persecution  and 
abuse  heaped  upon  Mr.  Wm.  H.  Vanderbilt  and  his 
family,  by  certain  newspapers  and  would-be  labor  re- 
formers, is  so  well-known  and  so  unrelenting,  that  I 
may  be  excused  in  using  this  name  in  an  illustration.* 

*  I  wish  to  make  it  plain  that  I  have  used  this  name  only  by  way  of  illus- 
trating my  point  clearly  and  with  no  intention  of  appearing  as  the  champion 
of  any  individual.  For  Mr.  Vanderbilt's  name  may  be  substituted  that  of  any 
other  law  abiding  citizen  who  possesses  and  manages  property  acquired  in  the 
development  of  American  enterprises. 


Unfair  Abuse  of  Rich  Men. 


It  is  not  charged  that  Mr.  Vanderbilt's  wealth  has  been 
acquired  in  an  unlawful  way,  or  that  it  is  employed  by 
him  for  unlawful  purposes.  It  is  not  charged  that  he 
has  robbed  any  man,  or  that  any  man  is  the  poorer  to- 
day by  reason  of  his  possessing  millions.  As  far  as  is 
known,  Mr.  Vanderbilt  and  his  family  are  respectable 
people,  affectionate  in  their  family  relation  and  reason- 
ably courteous  in  their  intercourse  with  friends  and 
strangers.  They  have  done  nothing  to  attract  public 
attention  to  themselves.  They  have  not  been  overbear- 
ing or  ostentatious,  and  have  set  no  example  of  vicious 
or  corrupt  luxury.  But  it  is  known  that  Mr.  Vander- 
bilt owns  a  large  amount  of  stock  in  several  important 
railroad  companies,  which  probably  afford  him  a  larger 
income,  than  any  other  man  in  this  country  enjoys.  On 
this  account  alone  he  is  made  to  appear  in  a  peculiar 
and  unenviable  light  to  a  large  part  of  the  people  of 
this  country.  His  face  is  freely  caricatured  in  all  the 
comic  papers.  Almost  every  week  he  is  depicted  lead- 
ing a  typical  workman  in  chains,  or  is  represented  as  a 
fierce  dragon  devouring  helpless  laborers  with  their 
wives  and  children.  Newspaper  correspondents  vie 
with  each  other,  in  inventing  unfavorable  gossip  about 
him  and  his  surroundings,  and  leading  articles  daily 
denounce  him  without  stint.  In  fact  so  far  is  this 
misrepresentation — this  outrage  upon  private  life  and 
character  carried,  that  I  think  a  considerable  part  of 
the  American  public  conceive  of  him  as  a  sort  of 
resurrected  Nero  or  Caligula — a  modern  tyrant,  gross 
and  remorseless,  levying  cruel  and  unjust  assessments 


Sfi  The  Labor -Value  Fallacy. 

on  the  poverty-stricken  people  who  travel  on  his  rail- 
roads, smiling  at  the  tears  and  groans  of  his  victims, 
and  muttering  as  he  figures  up  his  dividends,  "the 
public  be  damned." 

The  fact  is,  Mr.  Vanderbilt  is  receiving  a  proportion- 
ately small,  and  a  well  earned  part  of  the  profits  of 
the  greatest  economical  device  of  modern  times.  Mr. 
Vanderbilt's  father  possessed  extraordinary  ability. 
He  had  the  value-sense  largely  developed,  and  with  it 
great  energy  and  persistence.  He  organized  and  per- 
fected a  great  system  of  cheap  transportation,  which  has 
brought  immense  wealth  and  prosperity  to  the  people 
of  this  country.  The  results  of  the  combinations  which 
his  genius  effected  are  an  unprecedented  increase  in  the 
means  of  subsistence,  an  unparalleled  multiplication  of 
population.  It  is  very  likely  that  some  of  the  reckless 
agitators,  who  are  to-day  denouncing  the  Vanderbilt 
family,  owe  the  bread  they  eat  to  Commodore  Vander- 
bilt's commercial  genius.  It  may  be  said,  that  some 
one  else  would  have  consolidated  the  New  York  Cen- 
tral and  Hudson  River  rail-roads,  and  extended  its 
connections  in  the  West,  if  Commodore  Vanderbilt  had 
not  done  so.  This  may  or  may  not  be  probable.  No 
one  can  tell.  But  if  so,  some  other  man's  children 
would  to-day  be  enjoying  the  Vanderbilt  income.  He 
who  renders  a  great  service  to  society  is  worthy  of  a 
great  reward.  Mr.  W.  H.  Vanderbilt  is  to-day  receiv- 
ing his  just  dues,  under  the  contract  which  civilized 
society  holds  with  all  its  members.  This  contract  is 
the  very  corner-stone  of  all  civilization.  To  injure  or 


'Republican  Riches.  87 

destroy  it  is  to  turn  mankind  about  and  start  the 
race  on  the  downward  road  to  barbarism.  Even  to 
question  its  importance  argues  ignorance  and  degen- 
eracy. 

Mr.  Vanderbilt's  large  income  is  often  spoken  of  as 
a  monstrous  injustice  in  a  republic.  This  shows  a  sin- 
gular confusion  of  ideas,  and  that  there  are  some  per- 
sons who  imagine  that  a  republican  form  of  govern- 
ment is  somehow  to  cause  an  equal  distribution  of  men- 
tal and  physical  powers  to  all  its  citizens.  This  is  not, 
and  never  can  be  its  function  or  object.  The  equal 
protection  of  every  man  in  the  exercise  of  his  peculiar 
powers,  is  the  object  and  glory  of  republican  government. 
By  this  means  each  man  is  encouraged  to  use  his  pow- 
ers to  the  best  advantage,  and  the  results  which  he  may 
be  able  to  attain  are  guaranteed  to  him  and  to  his  chil- 
dren, according  to  their  ability  to  retain  them.  Mr. 
Vanderbilt's  large  income  should  be  regarded  as  an 
evidence  of  the  grand  opportunities  afforded  under 
well  regulated  popular  governments.  It  should  be  an 
incentive  to  every  citizen  to  be  diligent  in  devising  eco- 
nomic benefits  for  the  public,  that  he  and  his  children 
also  may  be  rich  and  prosperous. 

While  I  am  writing  this  a  cable  dispatch  comes  to 
the  effect  that  Mr.  Henry  George  has  been  received  on 
arrival  at  the  rail-road  station,  in  London,  by  fifteen 
hundred  persons,  representing  the  Land  Reform  Union, 
and  that  he  has  made  a  speech.  The  telegraph  repre- 
sents him  as  saying  : 


88  The  Labor -Value  Fallacy. 

"  Power  must  always  be  with  the  masses.  Do  not 
ask  for  patronage  or  charity,  but  demand  justice — your 
own  rights,  and  the  rights  of  those  below  you.  In  this 
way  we  shall  conquer." 

There  is  a  great  deal  of  very  dangerous  error  in 
these  few  words,  but  the  fifteen  hundred  people  whom 
Mr.  George  addressed  are  probably  doing  their  best  to 
believe  these  errors,  to  propagate  and  to  act  on  them. 
And  in  this  fact  lies  the  necessity  of  exposing  these 
errors  and  refuting  them,  lest  great  social  damage  be 
done,  lest  multitudes  suffer  useless  misery. 

The  power  which  the  masses  possess  is  mere  physical 
force.  Without  intelligent  guidance  it  is  no  more  than 
the  power  of  so  many  beasts.  And  whether  this  power 
is  to  be  exerted  benevolently  or  malevolently  depends 
on  the  wisdom  with  which  it  is  directed.  It  must 
be  manifest  to  every,  man,  that  this  power  misguided 
will  do  immense  harm.  If,  then,  the  masses  are  led  to 
believe  that  they  suffer  injustice,  when  no  injus- 
tice is  done  them,  or  that  they  are  denied  some  rights, 
when  in  fact  they  are  enjoying  all  their  possible  rights, 
it  must  be  admitted  that  they  are  grossly  misguided, 
and  are  in  danger^of  doing  great  mischief.  The  ques- 
tion then  is,  are  the  masses  deprived  of  any  just  rights  ? 
By  the  masses  I  suppose  Mr.  George  means  those  per- 
sons who  have  little  or  no  property,  and  are  dependent 
on  their  daily  earnings  for  their  daily  sustenence.  To 
this  question  then  the  answer  is  plain.  All  men  are 
equal  before  the  law  ;  all  men  have  equal  rights.  This 
is  true  to  its  fullest  extent  in  this  country.  It  is  true 


Rights  of  the  Masses.  89 

with  but  slight  limitations  in  England.  Those  who 
compose  the  masses,  and  those  who  make  up  the 
remainder  of  society,  have  the  same  rights,  and  society 
guarantees  and  secures  to  each  man,  whether  he  be 
rich  or  poor,  laborer  or  capitalist,  the  enjoyment  of 
these  rights.  These  rights  are  numerous  and  well 
defined.  The  right  of  personal  liberty,  and  the  right 
to  acquire,  possess  and  dispose  of  property,  are  per- 
haps the  most  important ;  and  it  is  the  last  and  most 
carefully  guarded  triumph  of  civilization,  that  no  dis- 
crimination is  made  against  any  man  in  respect  to  his 
rights,  on  account  of  his  learning,  his  belief,  his  wealth 
or  his  position  in  the  state.  The  laborer  has  now  the 
same  rights,  no  less  and  no  more,  which  every  other 
man  possesses.  Neither  Mr.  George  nor  any  other 
man  can  truthfully  deny  this.  What  then  does  Mr. 
George  mean,  when  he  urges  workingmen  to  demand 
their  rights  ?  He  can  mean  nothing  else  but  that  the 
masses  have  rights,  which  others,  who  are  not  the 
masses,  do  not  possess.  If  he  means  this,  he  is  lead- 
ing the  masses  to  demand  something  more  than  their 
just  rights.  He  is  striving  to  direct  the  power,  which 
is  in  the  masses,  to  the  upsetting  of  the  benevolent 
development  of  society.  He  would  have  the  masses 
destroy  the  organizations  of  industry  and  commerce, 
by  removing  the  master  minds  who  direct  them.  He 
would  deprive  mankind  of  all  motive  for  exertion  but 
the  mere  temporary  desire  for  food  and  clothing.  Any 
higher  object,  if  attained,  would  lift  an  individual  above 
the  masses,  and  would  work  a  deprivation  of  the  sup- 


90  The  Labor -Value  Fallacy. 

posed  rights,  which  he. exhorts  the  masses  to  demand. 
The  spirit  of  Mr.  George's  harangue  is  to  discourage 
all  effort  but  that  which  is  merely  physical,  and  to  sub- 
stitute for  the  competition  of  intellect,  a  competition 
of  idleness.  Is  this  the  proper  intelligence  to  guide 
the  power  of  the  masses  ? 

Mr.  George  has  at  various  times  indulged  in  a  good 
deal  of  unpleasant  rant  about  Mr.  Wm.  H.  Vanderbilt 
and  his  so-calle'd  unearned  wealth,  but  it  has  probably 
never  occurred  to  him  to  make  a  comparative  state- 
ment of  the  happiness  and  misery  which  he  and  the 
much  abused  millionaire  are  causing  in  their  day  and 
generation.  Mr.  George  very  likely  counts  himself 
something  of  a  philanthropist,  yet  a  truthful  statement 
of  this  kind  might  surprise  him.  It  is  not  necessary 
to  give  Mr.  Vanderbilt  credit  for  benevolent  motives, 
or  to  take  into  account  his  active  chanties,  if  such 
there  are.  It  is  needful  only  to  assume  that  he  man- 
ages his  large  property  on  just  business  principles,  and 
it  is  easy  to  see  that  he  is  constantly  furnishing  the 
means  of  living  to  a  large  number  of  men,  and  that  he 
is  instrumental  in  assisting  a  much  larger  number  to 
acquire  a  portion  of  the  comforts  which  they  enjoy. 
But  what  have  been  the  results  of  Mr.  George's  efforts? 
Has  he  ever  conferred  any  material  benefit  on  any  con- 
siderable number  of  his  fellow-men  ?  Has  he  not 
rather  rendered  a  great  many  men  discontented  ?  Is 
not  the  sum  of  human  misery  increased  by  the  work 
•  which  he  has  been  engaged  in  ?  Are  not  the  fifteen 


Charity  and  Patronage.  91 

hundred  vvorkingmen  of  London  worse  members  of 
society  for  the  exhortations  which  he  has  addressed  to 
them?  If  his  words  have  been  heeded,  he  has  un- 
questionably rendered  labor  Jess  cheerful  and  hence 
less  efficient.  Discontent  among  laborers  causes 
slackening  of  exertion  and  waste  in  production.  Can 
any  one,  who  has  given  any  attention  to  Mr.  George's- 
addresses  to  workingmen,  doubt  that  they  have  re- 
tarded the  wheels  of  industry  in  a  thousand  factories? 

iMr.  George  says  to  the  workingmen  of  London, 
"  Do  not  ask  for  patronage  or  charity."  There  is  a 
tone  of  manly  independence  in  these  words  which  is 
very  deceptive.  No  man  should  ask  for  charity  except 
as  the  last  resort.  A  proper  spirit  will  lead  a  man  to 
practice  all  possible  economy  and  self-denial  rather 
than  ask  charity.  In  this  self-denial  lies  the  manliness 
of  not  asking  charity.  But  this  is  not  the  meaning  of 
Mr.  George.  Self-denial  and  personal  economy  have 
no  place  in  his  teachings.  He  tells  his  followers  not 
to  ask  patronage  or  charity.  Now  asking  patronage  is 
entirely  different  in  character  from  asking  charity. 
The  only  sense  in  which  the  word  patronage  is  used  in 
commercial  affairs  is  as  an  equivalent  for  the  favor  of 
customers  or  employers,  or  favor  in  trade.  It  is  nec- 
essary for  success,  in  nearly  if  not  quite  all  the  modes 
by  which  men  make  their  livings,  that  they  should  ask 
patronage.  And  he  who  is  most  apt  at  soliciting  pat- 
ronage is,  other  things  being  equal,  likely  to  secure 
the  best  living.  The  banker,  the  merchant,  the  physi- 


The  Labor  -  Value  Fallacy. 


cian,  the  lawyer,  and  even  the  clergyman  have  well 
known  ways  of  asking  patronage.  The  railroad  com- 
pany and  the  manufacturer  ask  patronage  most  per- 
sistently and  are  not  ashamed.  Why  should  laborers 
bo  too  proud  in  spirit  to  ask  the  patronage  of  employ- 
ers ?  The  tradesman  does  not  think  it  unmanly  or 
humiliating  to  ask  people,  who  have  the  means,  to  buy 
his  goods.  It  might  be  more  according  to  his  taste  to 
put  out  no  sign,  to  make  no  display  of  his  wares,  but 
to  wait  for  purchasers  to  find  him  as  best  they  could. 
A  shopkeeper  who  scorned  to  ask  patronage,  however, 
would  have  to  content  himself  with  small  profits  in 
these  days  of  active  competition.  Yet  this  is  the  line 
of  conduct  which  Mr.  George  advises  laborers  to  pur- 
sue. Having  the  commodity  labor  for  sale,  they  should 
not  ask  for  employment.  They  should  stand  proudly 
apart  and  wait  until  employers  solicit  them  to  labor. 
Is  it  anything  unreasonable  to  say  that  the  laborers, 
who  follow  Mr.  George's  advice,  will  be  left  behind  in 
the  race  by  the  patronage-asking  laborers  ?  The  latter 
will  find  the  best  work  and  the  best  pay,  and  will  enjoy 
prosperity,  while  Mr.  George's  misguided  disciples, 
neglecting  to  ask  patronage,  but  demanding  more  rights 
than  other  people,  will  remain  floundering  in  poverty. 


trim    RSITT 


"The  Book  is  Worth  Heading." 

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THE  THEORIES  OF  DARWIN 

AND  THEIR  RELATION  TO  PHILOSOPHY,  RELIGION, 
AND  MORALITY. 

TRANSLATED  FROM  THE  GERMAN  OF 
RUDOLF  SCHMID, 

BY  G.   A.   ZlMMERMANN,   PH.D.,  WITH  AN  INTRODUCTION  BY 
THE  DUKE  OF  ARGYLL. 

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unprejudiced  judgment,  which  may  err,  but  not  blindly,  and  a 
scholarly  mind.  The  doctrines  of  Darwin  are  not  more  logically 
expounded  and  accurately  sifted  than  is  every  conspicuous  modi- 
fying and  magnifying  phase  through  which  they  have  passed  in 
the  hands  of  German  and  English  scientists,  stated  with  a 
fidelity  and  courtesy  as  generous  as  we  must  reluctantly  admit  it 
to  be  rare." — Chicago  Tribune. 

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